Bond price calculator
Price a coupon bond from face value, coupon rate, maturity, and yield to maturity.
What this calculator covers
Use this calculator to estimate the fair price of a coupon-paying bond from its cash flows and the market yield.
The result breaks the bond into its coupon stream and maturity payment so premium-versus-discount pricing stays easy to audit.
Frequently asked questions
- Why does a bond trade above or below its face value?
- A bond trades at a premium when its coupon rate exceeds the current market yield, because investors are paying extra for above-market income. It trades at a discount when the coupon is below the market yield. Par pricing only occurs when both rates are equal.
- What inputs does this calculator need?
- You need the bond's face value, annual coupon rate, years to maturity, coupon payment frequency, and the yield to maturity you want to price the bond at. The calculator handles semiannual, quarterly, and annual coupon schedules.
- Does the calculator give the exact market price of a real bond?
- No — it produces a theoretical fair value based on your inputs. Real market prices also reflect credit risk, liquidity, tax treatment, embedded options, and supply-and-demand conditions not captured in the discounted cash flow model.
- What is the difference between coupon rate and yield to maturity?
- The coupon rate is the fixed percentage of face value the bond pays each year, set at issuance and unchanged. Yield to maturity is the annualized return an investor earns if they buy the bond at today's price and hold it to maturity, including both coupon income and the price difference from par.
Tool
Run the calculation
Result
RESULT · BOND PRICE
â„–203
Primary result
$1,038.97
A $1,000.00 bond with a 5.5% coupon priced at a 5% yield to maturity is worth $1,038.97 today, a premium of $38.97 versus par.
- Bond price
- $1,038.97
- Coupon per period
- $27.50
- Annual coupon
- $55.00
- Periodic yield
- 2.5000%
Step-by-step solution
- 1.Convert the annual coupon into 2 coupon payments of $27.50 each year.
- 2.Discount the 20 coupon payments and the $1,000.00 principal repayment at the per-period yield of 2.5000%.
- 3.Add the present value of the coupon stream and principal repayment to reach $1,038.97.
Walkthrough
Visual walkthrough
A bond price is just the present value of two cash-flow legs: the coupon stream and the face value repaid at maturity.
01
Break the coupon into payment periods
$55.00 annual coupon ÷ 2
Coupon-paying bonds distribute the annual coupon across the selected number of coupon periods each year.
02
Discount coupons and principal
20 discounted cash-flow periods
The market yield sets the discount rate that turns future bond cash flows into today’s price.
03
Read premium or discount
A coupon rate above the market yield pushes the bond above par, while a lower coupon rate pushes it below par.
$1,038.97 price