Bond Price Calculator

Q: What happens to bond price as maturity approaches?

A bond's price converges to its face value as it approaches maturity, regardless of whether it was trading at a discount or premium.

Q: What is a premium bond?

A premium bond trades above its face value because its coupon rate is higher than current market interest rates (YTM). Investors pay more for the higher income stream.

Use our free bond price calculator to determine the fair price of a bond. Enter the face value, coupon rate, yield to maturity, and time to maturity to compute the bond's present value.

Financial

Currency

Face Value (Par Value)

Coupon Rate (%)

Yield to Maturity (%)

Years to Maturity

years

Coupon Payments per Year

Formula

The fair price of a bond is the present value of all future cash flows (coupon payments and face value at maturity) discounted at the yield to maturity. This calculator determines the bond price using discounted cash flow analysis.

Bond Price = Î£(Coupon / (1+YTM/n)^t) + Face Value / (1+YTM/n)^n

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter the bond's face value and coupon rate.
2Enter the yield to maturity (YTM) required by the market.
3Set the years to maturity and payment frequency.
4The calculator computes the present value of all future cash flows.

Examples

$1,000 face value, 5% coupon, 6% YTM, 10yr, semi-annual

1.Coupon per period = $1,000 Ã— 5% / 2 = $25
2.Periods = 10 Ã— 2 = 20
3.Rate per period = 6% / 2 = 3%
4.Bond Price â‰ˆ $925

Result: $925.61

Frequently Asked Questions

Bond price and YTM have an inverse relationship. When YTM rises above the coupon rate, the bond trades at a discount (< face value). When YTM falls below the coupon rate, it trades at a premium.

A bond's price converges to its face value as it approaches maturity, regardless of whether it was trading at a discount or premium.

A premium bond trades above its face value because its coupon rate is higher than current market interest rates (YTM). Investors pay more for the higher income stream.

Related Calculators

Bond Calculator Bond Yield Calculator Yield to Maturity Calculator Investment Calculator Tip Calculator Discount Calculator

Bond Pricing Guide

CalculateMe Team

Last updated: 2026-07-16

Frequently Asked Questions

Bond price and YTM have an inverse relationship. When YTM rises above the coupon rate, the bond trades at a discount (< face value). When YTM falls below the coupon rate, it trades at a premium.

A bond's price converges to its face value as it approaches maturity, regardless of whether it was trading at a discount or premium.

A premium bond trades above its face value because its coupon rate is higher than current market interest rates (YTM). Investors pay more for the higher income stream.

Bond Price Calculator

Formula

How It Works

Examples

$1,000 face value, 5% coupon, 6% YTM, 10yr, semi-annual

Frequently Asked Questions

How is bond price related to YTM?

What happens to bond price as maturity approaches?

What is a premium bond?

Related Calculators

Related Articles

Bond Price Calculator

Formula

How It Works

Examples

$1,000 face value, 5% coupon, 6% YTM, 10yr, semi-annual

Frequently Asked Questions

How is bond price related to YTM?

What happens to bond price as maturity approaches?

What is a premium bond?

Related Calculators

Related Articles