Use our free Bond Price Calculator to easily determine the fair value of a bond. Input key details like face value, coupon rate, market yield, and maturity to make informed investment decisions and understand bond valuation.
Formula:
The bond price (P) is calculated as the present value of its future cash flows, including periodic coupon payments and the face value at maturity. The formula used is:
P = C × [1 - (1 + r)-n] / r + FV / (1 + r)n
Where:
- P = Bond Price
- C = Coupon Payment per period (Annual Coupon Rate × Face Value / Compounding Frequency)
- r = Market Yield (Yield to Maturity) per period (Annual YTM / Compounding Frequency)
- n = Total Number of periods (Years to Maturity × Compounding Frequency)
- FV = Face Value (Par Value)