Calculate a bond's fair price from its face value, coupon rate, years to maturity, and market yield (YTM). See the price, total coupon income, current yield, and whether it trades at a premium or discount.
Price & yield of a fixed-coupon bond
A bond's fair price is the present value of all its future cash flows — the periodic coupon payments plus the face value repaid at maturity — discounted at the market yield (yield to maturity, or YTM). When the YTM equals the coupon rate, the bond is worth exactly its face value (par). When market yields rise above the coupon rate, the bond is worth less than par (a discount); when yields fall below the coupon rate, it's worth more than par (a premium). This inverse relationship between yields and prices is the central fact of bond investing.
For example, a $1,000 bond with a 5% coupon paid semi-annually, maturing in 10 years, priced to a 6% market yield, is worth about $925.61 — a discount, because newer bonds offer a higher 6% yield. The calculator also shows the current yield (annual coupon ÷ price) and total coupon income over the bond's life.
When market yields rise, existing bond prices fall, and vice versa. Longer maturities are more sensitive to yield changes.
Coupon > YTM → premium (price above par). Coupon < YTM → discount (price below par). Coupon = YTM → par.
Annual coupon ÷ current price. A quick income measure, though YTM is the complete return including price changes to maturity.