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How it works
Formula & explanation
Bond Calculator uses the following calculation:
Price = Σ Coupon/(1+y)t + FaceValue/(1+y)n
This is a simplified model intended for planning and education. Real-world offers from lenders, institutions, or tax authorities may include additional fees, rules, or adjustments not reflected here.
FAQ
Frequently asked questions
Why does a bond trade below face value?
When market yields rise above the bond's coupon rate, its price falls so a new buyer earns a competitive effective yield — this is trading 'at a discount.'
What's the relationship between bond prices and interest rates?
They move inversely: as market rates rise, existing bond prices fall, and vice versa.
What is coupon rate versus yield?
Coupon rate is the fixed rate printed on the bond determining its interest payments; yield reflects the actual return based on the price paid.
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