Work out zero coupon bond price instantly with clear inputs, formula shown and shareable results.
A zero-coupon bond pays only face value at maturity, so its price is simply that face value discounted at the yield. With no interim cash flows its duration equals its maturity, making it the most rate-sensitive bond of its term.
Zero-coupon price
P = F / (1 + y)^t; duration = t
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
All the value sits in one distant payment, so discounting bites hardest. A 20-year zero moves roughly twice as much as a 10-year one.
Many regimes tax the annual accretion even though no cash is received — check before holding zeros outside a tax shelter.