Free online bond calculator. Compute Yield to Maturity (YTM), current yield, Macaulay and modified duration, premium/discount classification and total coupon income.
Price a bond in seconds. Enter face value, coupon rate, market price, market YTM, years to maturity and coupon frequency to get Yield to Maturity, current yield, total coupons, and the bond's Macaulay / modified duration.
Yield to Maturity (YTM)
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Current Yield
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Bond Type
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Macaulay Duration
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Modified Duration
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Total Coupons
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Total Gain
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Bond Pricing Fundamentals
What Is a Bond?
A bond is a debt security: you lend money to a government or company, they pay you regular coupons and return the face value at maturity. The bond's price equals the present value of all future cash flows, discounted at the appropriate yield.
Face value $1,000, 5% annual coupon, market YTM 6%, 10 years, semi-annual payments:
Coupon per period = $25
Periods = 20
Period yield = 3%
PV of coupons ≈ $370.49
PV of face ≈ $553.68
Bond price ≈ $924.17
Yield to Maturity (YTM)
YTM is the internal rate of return you earn if you buy the bond at the current price and hold it to maturity, reinvesting all coupons at the same rate. It solves the equation:
Price = Σ ( C / (1 + YTM)^t ) + F / (1 + YTM)^n
Our tool uses a numerical bisection method, which is robust even when the price is unusual.
Current Yield
A simpler, cruder measure:
Current Yield = Annual Coupon / Current Price
If a bond pays $50/year and trades at $950, current yield is 5.26%. Current yield ignores capital gain/loss and the time value of remaining coupons.
Macaulay duration is the weighted-average time at which you receive cash flows, expressed in years. Modified duration approximates the percentage price change for a 1% change in yield:
ΔP / P ≈ - Modified Duration × Δy
A 7-year modified duration means a 1% yield rise pushes the price down roughly 7%. Long-term, low-coupon bonds have the highest duration; short-term, high-coupon bonds have the lowest.
Reinvestment Risk
YTM assumes you can reinvest every coupon at the same rate. In reality rates move. The realised return can differ from YTM, especially for long-maturity, high-coupon bonds.
About This Tool
YTM is solved numerically via bisection, pricing uses standard present-value math, and durations follow the closed-form Macaulay definition with the modified-duration formula above. Charts use Chart.js (MIT).
Frequently Asked Questions
Why is the bond price different from face value?
Face value is what the issuer pays back at maturity. The market price reflects the present value of all future coupons and that face payment, discounted at the prevailing market yield. When the coupon rate differs from the market yield, the price will be above (premium) or below (discount) par.
What is the difference between YTM and current yield?
Current yield only looks at the annual coupon divided by today's price. YTM also accounts for the capital gain or loss you'll realise at maturity and the compounding of coupon reinvestment. YTM is therefore the more complete return measure for buy-and-hold investors.
Why does duration matter?
Modified duration estimates how much the bond price will move when yields change. A 6-year modified duration means roughly a 6% price drop for a +1% yield move. Investors who expect rates to rise prefer short-duration bonds; those who want to lock in yield can accept longer duration.
Does YTM assume I reinvest coupons?
Yes. YTM is the internal rate of return assuming every coupon is reinvested at the same YTM. If you can't reinvest at YTM, realised returns will differ — that's called reinvestment risk.
What is a par bond?
A par bond trades at exactly face value. This happens when the coupon rate equals the prevailing market yield, so no premium or discount is needed to make the bond attractive.
How often are coupons usually paid?
Most government and corporate bonds pay semi-annually. Some municipal bonds pay monthly or quarterly. Higher frequency increases the effective compounding, raising the realised return slightly at the same nominal coupon.
Are zero-coupon bonds supported?
Zero-coupon bonds are a special case: set the coupon rate to 0%. The calculator will correctly price the bond as the discounted face value only, and YTM will reflect the implied annualised capital-gain return.