Bond Price Calculator
Use this bond price calculator to value a fixed-coupon bond from its face value, coupon, yield and maturity, and see whether it trades at a premium or discount.
What it does
The Bond Price Calculator works out what a fixed-coupon bond is worth today by discounting every future coupon and the final repayment of face value at the yield to maturity. It shows whether the bond trades at a premium, at par, or at a discount.
Data sources & parameters
This calculator uses standard financial formulas and runs entirely in your browser. It needs no external rate data — your result is computed only from the values you enter above.
We always strive to use the latest data for every variable so our results and reports are as accurate as possible. Even so, errors are possible — you should not rely on this tool or its report alone, and we accept no liability for any decision made based on it.
The formula
Price = Σ C / (1 + y)^t + F / (1 + y)^n, where C is the coupon per period, y the yield per period, F the face value, and n the number of periods
How it works
Each coupon is a cash flow discounted back to today, and the face value is discounted from the maturity date. Adding those present values gives the price. When the yield to maturity is above the coupon rate the price falls below par; when it is below, the price rises above par.
Where it is used
- Valuing a bond before buying or selling it on the secondary market
- Seeing how a change in market yields moves a bond's price
- Comparing premium, par, and discount bonds side by side
Worked example
A bond with a $1,000.00 face value pays a 5% coupon for 10 years. With the market demanding a 6% yield, its fair price is …, a discount of … to par, while paying … in coupons over its life.
What the bond price calculator does
Enter a fixed-coupon bond's face value (usually the amount repaid at maturity), coupon rate, the yield to maturity the market currently requires, the years left to maturity, and whether coupons are paid annually, semi-annually or quarterly. The bond price calculator returns the fair price, the total coupon cash over the bond's life, and whether it trades at a premium, at par or at a discount. A bond rarely trades at exactly its face value, because its price moves as market yields change.
How a bond is priced
A bond promises regular coupons plus repayment of its face value at maturity. Its price is what that stream of future payments is worth today. Each payment is discounted at the yield to maturity over the periods until it arrives, and the present values are added together. When the yield equals the coupon rate, they sum to exactly the face value and the bond trades at par.
Premium, par and discount
- Discount: when the market yield is above the coupon rate, the fixed coupons look low next to new bonds, so the price falls below face value. The buyer earns the extra return as the price rises to par at maturity.
- Par: when the yield equals the coupon rate, the price equals the face value.
- Premium: when the market yield is below the coupon rate, the coupons are generous, so buyers pay more than face value, which brings the overall return back down to the market yield.
Price and yield move in opposite directions: when yields rise, existing bond prices fall, and when yields fall, they rise.
Why yield changes move the price
Keep everything else fixed and move the yield up and down. Even a small change shifts the price, and more so for bonds with longer to run, because the discounting applies over more periods. A ten-year bond's price reacts far more to a one-point rise in yields than a two-year bond's. Longer bonds therefore carry more price risk if rates rise and more potential gain if they fall.
Reading the results
The result is a clean, theoretical value. Between coupon dates, a buyer normally pays this clean price plus interest accrued since the last coupon, which the calculator does not include. The yield you enter should already reflect the issuer's creditworthiness: a riskier issuer trades at a higher yield and a lower price. Trading spreads, commissions and taxes also affect what you pay or receive. Use the output as a fair-value benchmark for comparing bonds or testing how a change in yields would reprice a holding.
If your own required yield is higher than the market's, the bond looks expensive to you, and the reverse if it is lower. Entering your own view of rates and credit risk shows whether a quoted price offers value.
This article is general information only and is not financial advice.
About This Bond Price Calculator
Use this bond price calculator to get an instant estimate based on the figures you enter. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.
Frequently asked questions
How does the bond price calculator work?
Why is a bond's price different from its face value?
What is yield to maturity?
How does coupon frequency affect the price?
Does this calculator include accrued interest or taxes?
Is my data kept private?
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