Last updated October 12, 2026 · Report an error
A bond's price moves opposite to market interest rates, which can be confusing without seeing the underlying present-value math.
This calculator finds a bond's fair price and current yield from its face value, coupon rate, years to maturity, and the prevailing market yield.
How it works
Enter the bond's face value, annual coupon rate, years to maturity, and the current market yield for similar bonds. The calculator finds the present value of all future coupon payments plus the present value of the face value repaid at maturity, discounted at the market yield.
- Enter face value ($).
- Enter annual coupon rate (%).
- Enter years to maturity.
- Enter required market yield (%).
- Click Calculate to see your results.
Examples
$1,000 face value, 5% coupon, 6% market yield
A $1,000 bond with a 5% annual coupon and 10 years to maturity is priced at about $926.40 when the market yield is 6%, since it trades at a discount below face value.
Who should use it
- Estimating a fair price for a bond given current market yields.
- Understanding how interest rate changes affect bond prices.
Industry applications
- Fixed income investing
- Finance education
Advantages
- Shows whether a bond trades at a premium, discount, or par, with a plain-language explanation.
- Uses the standard present-value bond pricing formula.
Limitations
- Assumes annual coupon payments and doesn't account for accrued interest between payment dates.
Common mistakes to avoid
- Confusing current yield with yield to maturity — they measure different things and are usually not equal.
- Assuming a bond always trades at face value regardless of market interest rate changes.
Best practices
- Compare a bond's price and yield to newly issued bonds of similar credit quality and maturity before assuming it's under- or over-priced.
Tips
- Remember the inverse relationship: when market yields rise, existing bond prices fall, and vice versa — this calculator is a good way to see that relationship in concrete numbers.