Bond fair value.

Bond price calculator computes fair value as the present value of future cash flows: coupon payments plus return of face value at maturity. Formula: PV = Σ(coupon / (1+y)^t) + face / (1+y)^n. When market yield exceeds coupon rate, bond trades at discount (below face value). When yield is below coupon, bond trades at premium.

Example: 1,000 face value bond, 5% coupon (50/year, paid 25 semi-annually), 6% market yield, 10 years to maturity. PV of 20 coupon payments at 3% per period + PV of 1,000 face at 3% over 20 periods ≈ 926. Bond trades at 74 discount because market demands higher yield than coupon offers.

Bond pricing inversely related to interest rates: rates up = prices down, rates down = prices up. Duration measures sensitivity (longer maturity = more sensitive). Convexity measures curvature of price-yield relationship. Important: the calculation assumes you hold to maturity. Sell early and you take market price - which can be much different from purchase price.

A worked example

Try the defaults: face value of 1,000, annual coupon rate of 5%, market yield of 6%, years to maturity of 10 years. The tool returns 925.61. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Face Value (par), Annual Coupon Rate %, Market Yield %, Years to Maturity, and Payments Per Year. Frequency and unit price pull the total in different directions. The biggest surprise for most people is how small recurring amounts compound into large annual figures — that's where this calculation earns its keep.

The formula behind this

Sum of present values of all coupon payments plus present value of face value at maturity. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.