Price a bond by discounting its coupons and face value at the market yield.
A bond is the present value of its cash flows. When the market yield exceeds the coupon rate the bond must trade below face value for a buyer to earn that yield, which is the entire mechanism behind bond price moves. Bond prices move inversely to yields, and the size of that move is what duration measures.
Bond Price
Price = Σ coupon ÷ (1+y)ᵗ + face ÷ (1+y)ⁿ, with y the periodic yield
Price = Σ coupon ÷ (1+y)ᵗ + face ÷ (1+y)ⁿ, with y the periodic yield A bond is the present value of its cash flows. When the market yield exceeds the coupon rate the bond must trade below face value for a buyer to earn that yield, which is the entire mechanism behind bond price moves.
Bond prices move inversely to yields, and the size of that move is what duration measures.
This calculator takes 5 inputs: Face value, Annual coupon rate, Market yield to maturity, Years to maturity, Coupon payments per year. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.