Bond Price Calculator: Price, Yield & Duration
Calculate a bond's fair price from its face value, coupon rate, time to maturity and current market yield — then see whether it trades at a discount or premium, its current yield, duration and how much the price moves when rates change.
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Cash Flow & Accretion Ledger
Coupons, effective-interest earnings, discount accretion (or premium amortization), book value and the present value of each cash flow.
| Period | Timeline | Coupon Payment | Interest Earned | Accretion | Book Value | Present Value |
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The Bond Seesaw: Why Prices Fall When Rates Rise
A bond's coupon is fixed when it's issued. When market rates rise, new bonds pay more, so an older, lower-coupon bond has to sell for less than face value until its yield to maturity matches the market. When rates fall, the opposite happens.
Macaulay vs Modified Duration
Macaulay duration is the weighted-average time until you receive the bond's cash flows. Modified duration turns that into price sensitivity: a modified duration of 7.7 means the price moves roughly 7.7% in the opposite direction for each 1-percentage-point change in yield. Convexity explains why the real move is a little smaller for rises and larger for falls.
Why bond prices move opposite to interest rates
A bond's fixed coupon rate is set when it's issued, but market interest rates move over time. When market rates rise above a bond's coupon rate, the bond becomes less attractive relative to newer bonds paying more, so its price falls below face value (trading 'at a discount') to compensate buyers. When market rates fall below the coupon rate, the bond becomes more attractive and trades above face value ('at a premium').
This inverse relationship is one of the most fundamental concepts in bond investing — it's why bond prices and interest rates are often described as moving in opposite directions.
By Suhaib Hassan · Formula verified 27 Sep 2026 · How CalculatePilot verifies formulas →
What this price represents
This calculator computes fair value using present value math — discounting all future coupon payments and the final face value repayment back to today's dollars using the current market rate. This is the standard approach used throughout fixed-income valuation.
Price = C × [1 − (1 + y)^−n] ÷ y + F ÷ (1 + y)^n — C = coupon per period · y = market yield per period · n = number of periods · F = face value
Real-world bond prices can differ slightly from this theoretical fair value due to factors like credit risk (perceived risk of default), liquidity, and specific market supply and demand — this calculator provides the baseline valuation these real-world factors adjust from.
Frequently asked questions
Why would a bond trade below its face value?
When current market interest rates are higher than the bond's fixed coupon rate, the bond becomes less attractive compared to newer bonds, so its price falls below face value to compensate buyers with a better effective return.
What happens to a bond's price at maturity?
A bond's price converges to its face value as it approaches maturity, since at maturity the holder receives exactly the face value back — any premium or discount gradually shrinks to zero over the bond's remaining life.
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