Bond Price Calculator
Present value of the cash flows, and why price moves inversely to yield.
Work out Bond Price. Present value of the cash flows, and why price moves inversely to yield. Shows the working, not just the answer.
Bond price
$1,000.00
Trading at a par · current yield 5.000%
A bond's price is the present value of its cash flows, and the inverse relationship between price and yield falls straight out of that: the coupons are fixed, so if required yields rise the only thing that can adjust is the price. Here the coupon matches the market yield exactly, so the bond prices at par.
How the Bond Price Calculator works
A bond's price is the present value of its cash flows, and the inverse relationship between price and yield falls straight out of that: the coupons are fixed, so if required yields rise the only thing that can adjust is the price.
Also known as: bond valuation calculator · bond pricing formula · current yield calculator · bond premium and discount
Frequently asked questions
How is a bond priced?
By discounting every coupon and the face value back to today at the market yield, then adding them. This page shows both components separately.
Why do bond prices fall when rates rise?
Because the coupon is fixed. If new bonds pay more, an existing bond can only compete by costing less — the price falls until its effective yield matches the market.
What does trading at a premium or discount mean?
Above or below face value. A coupon higher than the market yield trades at a premium; lower trades at a discount; equal trades at par.
What is current yield?
The annual coupon divided by the price. It is a rough measure that ignores any capital gain or loss at maturity, which yield to maturity accounts for.
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