Bond Price Calculation

Written by:Abraham A.
Location:Bonds

Finance.ThinkAndDone.com provides you online tool to calculate price a bond when you provide the bond's maturity value, coupon rate, yield on bond, years till maturity. The online calculation tool shows step by step workout for bond price calculation using the Excel TVM equation that makes the bond price equal to the discounted sum of interest payments and maturity value of the bond. The calculation tool can show different calculations depending upon selection of frequency of interest compounding whether annual or semi-annual.

Location: Bonds

Bond Price Calculation

Developed by:Emma A.
Location:Financial Calculators
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Results

Interest compounded semi annually
Par value of bond is 1000
Coupon rate on bond is 0.04
YTM on bond is 0.04
Years till maturity are 20
Price = coupon rate x par value x PVIFA(ytm%, n) + par value x PVIF(ytm%, n)
PVIFA(0.04, 20) = 13.590326345
PVIF(0.04, 20) = 0.456386946201
Price = 0.04 x 1000 x 13.590326345 + 1000 x 0.456386946201
Price = 543.613053799 + 456.386946201
Price = 1000

Input Data

type in the maturity value of the bond (debt) 
type in the market rate of return (YTM) of the bond (debt) 
type in the coupon rate  
type in the years to maturity  

Instructions

You have to provide certain details about the bond for which you have find market price. Assuming we have a 8% $1000 bond with 10 years to maturity with similar bonds on market having yield of 8%.

  1. You have to key in 1000 as par value of the bond
  2. You have to key in 8 as the coupon rate
  3. You have to key in 8 as the yield on bond
  4. You have to key in 10 as years to maturity
Location: Financial Calculators