Bond Price Calculator
Calculate the fair market value of a bond instantly.
Enter bond details to see its fair value.
Price Breakdown
PV of Coupons
PV of Face Value
Total Price (PV)
What is a Bond?
A Bond is essentially a loan you give to an entity (government or corporation). In return, they promise to pay you periodic interest (coupons) and return your principal (face value) at maturity.
This calculator determines the Fair Price you should pay for a bond today, based on current market interest rates.
The Golden Rule: Interest Rates vs. Bond Prices
There is an inverse relationship between bond prices and market interest rates:
- If Market Rates Fall: Existing bonds with higher coupon rates become more valuable. Their price rises above face value (Premium).
- If Market Rates Rise: Existing bonds with lower coupon rates become less attractive. Their price falls below face value (Discount).
Bond Price Formula
The price is calculated by finding the Present Value (PV) of all future cash flows:
Bond Price = PV(Coupons) + PV(Face Value)
PV(Coupons) = C × [ (1 - (1 + r)^-n) / r ]PV(Face Value) = F / (1 + r)^n
Where C is the coupon payment, r is the market rate per period, n is total periods, and F is face value.