Bond Calculator
The price, yield and coupon of a bond or treasury bill.
Tip: The yield (rate of return) differs from the coupon when the bond's price differs from its face value.
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About this digital tool
The bond calculator works out the price, yield (return) and coupon of a bond or treasury bill. Enter the face value, the coupon rate, the maturity and the market rate or price, and the tool finds the fair price or the yield to maturity (YTM). The price is the present value of future coupons plus the discounted face value.
When market rates rise, the price of existing bonds falls, and vice versa. Treasury bills are seen as a low-risk investment compared with other instruments, but the return and terms depend on the issue. The result is an estimate and is not investment advice; verify the details of the official issue.
How to use
- Enter the face value and the coupon rate.
- Set the maturity and the market rate.
- See the price, the yield and the coupon cash flows.
Frequently asked questions
What is a treasury bill?
A treasury bill is a government debt instrument — you lend to the state and receive interest (a coupon) periodically plus the principal at maturity.
How is a bond's price calculated?
The present values of all coupons and of the face value returned at maturity are added, discounted at the market yield. The calculator does this automatically.
What is yield to maturity (YTM)?
It is the annual rate of return you earn if you buy the bond at the current price and hold it to the end, receiving all coupons. It is the standard way of comparing bonds.
Why does a bond's price fall when rates rise?
Because investors can buy new bonds with a higher coupon, so the older ones must fall in price to be comparable.