Work out the interest that has accrued since the last coupon and is added to the purchase price.
Bonds are quoted clean but settled dirty, so the buyer compensates the seller for interest earned but not yet paid. Accrual is straight-line across the coupon period on most day-count conventions. The gap between clean and dirty price surprises first-time bond buyers, who settle more than the quoted price by up to a full coupon.
Bond Accrued Interest
Accrued interest = coupon payment × days since last coupon ÷ days in the period
Accrued interest = coupon payment × days since last coupon ÷ days in the period Bonds are quoted clean but settled dirty, so the buyer compensates the seller for interest earned but not yet paid. Accrual is straight-line across the coupon period on most day-count conventions.
The gap between clean and dirty price surprises first-time bond buyers, who settle more than the quoted price by up to a full coupon.
This calculator takes 5 inputs: Face value, Annual coupon rate, Days since the last coupon, Days in the coupon period, Clean price. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.