Money ManagementETF vs Mutual Fund: Which Is Better for Beginners?
ETF vs Mutual Fund: Which Is Better for Beginners? Explore costs, tax implications, and trading flexibility for informed investment decisions.
MAJun 11, 2026Read More →
Bond Price Calculator
Find the fair price of a fixed-coupon bond by discounting its coupons and face value at the yield to maturity. Enter the details and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Price vs yield to maturity
Advertisement
How the bond price calculator works
A bond is just a stream of future cash flows: a coupon every period and the face value returned at maturity. Its fair price is what all of those payments are worth today. The calculator discounts each one using the yield to maturity and adds them up.
Splitting the price into the present value of the coupons and the present value of the face value shows where the value comes from. The chart then traces price against yield, which is the downward sloping curve at the heart of how bonds react to interest rates.
A quick example
Take a $1,000 bond paying a 5 percent coupon semi-annually for 10 years, priced at a 6 percent yield. Because the yield sits above the coupon, the bond is worth about $926, a discount to its $1,000 par. Drop the yield below 5 percent and the same bond would trade at a premium.
Things to keep in mind
This gives the clean price and ignores accrued interest between coupon dates, credit risk and taxes. For background on how bonds work, the SEC investor education site is a reliable source. Explore related tools with our other free calculators.
Frequently asked questions
How is the price of a bond calculated?
A bond price is the present value of everything it pays. You discount each coupon and the face value back to today using the yield to maturity, then add them together. The formula is the sum of the coupons divided by (1 + periodic yield) raised to each period, plus the face value discounted over all periods.
Why does a bond trade above or below par?
When the yield demanded by investors is below the coupon rate, the bond pays more than the market needs, so it trades at a premium above par. When the yield is above the coupon rate, the bond pays too little, so its price falls to a discount below par.
What is yield to maturity?
Yield to maturity is the single rate that makes the present value of all the bond's future cash flows equal to its price. It reflects the total return if you hold the bond to maturity and reinvest coupons at that rate. Here you enter the yield and the tool returns the matching price.
How does coupon frequency change the price?
Most bonds pay semi-annually, so the annual coupon and yield are split across two periods. More frequent payments discount cash flows over more, shorter periods, which slightly changes the price. Select the frequency that matches the bond you are valuing.
Related guides
View all →
Business FinanceHow Much Will $1,000 Invested Today Be Worth in 10 Years?
Invest $1,000 today and the answer to "what's it worth in 10 years?" ranges from about $1,040 in a basic savings account to roughly $2,594 at the stock market's long-run average. Here's the math behind every scenario — plus how inflation, fees and taxes change the real number.
MAJun 9, 2026Read More →
Business FinanceHow Much Do You Need to Retire Comfortably? (2026 Guide)
There's no single magic number for retirement — but there are proven formulas that get you close. Using the 4% rule, most people need roughly 25 times their annual spending invested. Here's how to find your personal target, factoring in Social Security, healthcare, inflation and lifestyle.
MAJun 9, 2026Read More →
Advertisement