Currency: USD
Enter all amounts in USD. Changing currency keeps numbers unchanged; no exchange rate is applied.
- Estimated bond price
- $884.43
- Coupon payment
- $25.00
How it works
Coupon yield and maturity yield differ
A bond paying 5 annually per 100 face value has a 5.56% current yield when priced at 90. Yield to maturity also includes redemption and timing, so it need not equal either 5% or 5.56%.
Reading bond price and yield together
A bond's coupon rate, market price, and yield describe different things. When working with settlement dates, check the payment schedule and day-count convention because accrued interest and remaining cash flows depend on them. Compare clean and settlement-related values using the labels shown. A calculated yield assumes the modeled payments and does not remove the possibility of default or changing market prices.
Bond value & yield: formula and assumptions
Price is the present value of coupons plus the face value at maturity.
Assumes a valuation exactly on a coupon date, no accrued interest, and no call/default features.
Settlement-date price & yield: formula and assumptions
Clean price = discounted coupons and redemption − accrued coupon interest.
Regular dated coupons follow the maturity day with month-end clamping. The final coupon uses the documented simple-discount branch. Clean price excludes accrued interest; the settlement cash price includes it.
Compare day-count conventions: formula and assumptions
30/360 count = 360×year difference + 30×month difference + normalized day difference.
US-NASD and European date normalization differ at month ends. Actual days use the civil calendar.
Worked example
Reference example currency: USD. These fixed examples do not change with your calculator preferences.
Using the Bond value & yield example:
- Solve for
- Price
- Face value ($)
- 1000
- Annual coupon rate (%)
- 5
- Annual nominal yield (%)
- 6
- Market price ($)
- 950
- Years
- 20
- Coupon payments per year
- Semiannual
Price is the present value of coupons plus the face value at maturity.
Example result
Estimated bond price: $884.43
Coupon payment: $25.00
These are illustrative inputs. Change the values to explore a different scenario.
What to keep in mind
The basic mode assumes coupon-date valuation. The dated mode handles regular annual, semiannual or quarterly coupons and nonnegative yields; odd coupons, call features, default and ex-coupon adjustments are excluded.
Formula references
- Investor.gov: financial tools (opens in a new tab)
- Microsoft PRICE documented method (opens in a new tab)
- Microsoft DAYS360 documented conventions (opens in a new tab)
References explain the underlying methods; they do not imply endorsement or individual professional review of Finflo.
Common questions
Is accrued interest included in the bond price?
The dated mode reports clean price, accrued interest and dirty price separately. Its cash settlement amount includes accrued interest. The basic years-to-maturity mode assumes coupon-date valuation.
Why does the day-count convention change the answer?
The convention determines the accrued portion of a coupon and the time to the next payment. US-NASD and European 30/360 can differ at month ends.
Does the yield account for default or early redemption?
No. These modes assume the scheduled regular coupons and redemption amount are paid.
Prepared by Finflo. See our methodology and editorial policy. Read the relevant professional-advice limitations.