A walkthrough, end to end.
- 1
Enter the bond's face value (par), annual coupon rate, years to maturity, and the current market yield (discount rate).
- 2
The calculator returns the bond's price, current yield, and approximate Macaulay duration.
- 3
Compare quoted bond prices to your fair-value calculation to spot mispricing.
Bond pricing — present value of cash flows
A bond's fair price is the PV of all future coupon payments plus the PV of the face value at maturity, discounted at the market yield. When market yield = coupon rate, bond prices at par. When yield > coupon, bond trades at discount; yield < coupon, premium.
What you can do with this.
US Treasury bonds
10-year Treasury, 4.5% coupon, paying semi-annually. With market yield at 4.25%, the bond trades at a slight premium (~$1,020 per $1,000 face). The calculator handles annual or semi-annual coupons.
Corporate bonds
Investment-grade corporate bonds typically trade 100–300 basis points above Treasury yield. Use the calculator with the corporate's specific yield to find fair price.
Municipal bonds (tax-equivalent yield)
Munis are federal-tax-free. To compare with taxable bonds, divide muni yield by (1 − marginal tax rate). A 4% muni at 32% bracket = 5.88% tax-equivalent yield.
Bond yield to maturity (YTM)
If you know the bond's price and want yield, the calculation reverses — solve for yield given price and cash flows. Most online bond quotes already show YTM; the calculator lets you verify.
Current yield vs. YTM
Current yield = annual coupon / current price. Simple to compute but ignores capital gain/loss to maturity. YTM is more accurate for buy-and-hold investors.
Duration and interest-rate risk
Macaulay duration measures the weighted-average time until cash flows are received. Modified duration approximates price sensitivity to yield changes — duration of 7 means ~7% price drop per 1% yield rise.
Zero-coupon bonds
No coupons; sold at deep discount, redeemed at face value. Treat as a single cash flow at maturity. Price = Face / (1+yield)^n. Use the calculator with coupon set to 0.
Bond calculator 2026 — what's current
10-year Treasury yield ~4.0–4.5%. Corporate IG yields ~5–6%. Use the calculator to compute fair value when current quotes look unusually rich or cheap vs. similar bonds.
Frequently asked.
Because market yields change. When prevailing yields rise above the bond's coupon, the bond becomes less attractive — its price falls so its yield-to-maturity matches the market. The reverse for falling rates.
Current yield is annual coupon divided by current price. YTM accounts for both coupons AND the eventual capital gain/loss to par at maturity. YTM is the apples-to-apples bond return.
Tells you how much the bond price will move for a 1% yield change. Duration of 7 → ~7% price drop on 1% yield rise. Critical for managing portfolio interest-rate risk.
No. Calculations run entirely in your browser.