Bond Calculator Bond Price & Yield YTM Solver Duration & Convexity Bond Ladder ...
Bond Calculator
Bond Price & Yield
Face Value ($)
Coupon Rate (%)
Years to Maturity
Market Yield (%)
Payment Frequency
Yield to Maturity (YTM)
Current Bond Price ($)
Face Value ($)
Annual Coupon Rate (%)
Years to Maturity
Payment Frequency
Duration & Convexity
Bond Price ($)
Face Value ($)
Coupon Rate (%)
Years to Maturity
Yield to Maturity (%)
Bond Ladder Strategy
Total Investment Amount ($)
Ladder Length (Years)
Average Coupon Rate (%)
Reinvestment Rate (%)
Click "Print or Save as PDF" above → Choose "Save as PDF" as your printer → Click "Save".
Results
Price Components
Understanding Bond Investment Metrics
Bonds are essential fixed-income investments that provide predictable income and portfolio diversification. However, understanding bond pricing, yields, and risk metrics is crucial for making informed investment decisions.
Bond price and yield are inversely related - when market interest rates rise, bond prices fall, and vice versa. Yield to Maturity (YTM) represents the total return if you hold the bond until maturity, accounting for price, coupon payments, and face value.
Duration and convexity measure interest rate sensitivity. Duration estimates price changes for small rate movements, while convexity accounts for the curvature in the price-yield relationship for larger changes.
Bond laddering is a strategy that spreads investments across bonds with different maturity dates, providing regular income, reduced interest rate risk, and flexibility to reinvest at prevailing rates.
Frequently Asked Questions
A: Current yield is the annual coupon payment divided by the current bond price. Yield to maturity (YTM) is the total return if you hold the bond until maturity, including all coupon payments and the difference between purchase price and face value. YTM is a more comprehensive measure of bond returns.
A: Duration measures a bond's sensitivity to interest rate changes. A bond with a duration of 5 years will decrease in price by approximately 5% for every 1% increase in interest rates. Longer-duration bonds are more sensitive to rate changes but typically offer higher yields.
A: You might buy a bond at a premium when its coupon rate is higher than current market rates. Even though you pay more than face value, the higher coupon payments compensate for the premium, and you'll receive the full face value at maturity.
A: YTM calculations assume you can reinvest all coupon payments at the same YTM rate, which may not reflect actual market conditions. They also assume the bond will be held to maturity and the issuer won't default. YTM is a useful estimate but has limitations in practice.
A: Bond ladders provide regular income as bonds mature, reduce interest rate risk by diversifying maturities, offer liquidity as bonds mature annually, and allow you to take advantage of changing interest rates by reinvesting maturing bonds at current market rates.
A: Duration provides a linear approximation of price changes, but the actual price-yield relationship is curved. Convexity accounts for this curvature, providing more accurate price change estimates, especially for larger interest rate movements or bonds with embedded options.
A: Yes, for zero-coupon bonds, set the coupon rate to 0%. The calculators will automatically adjust, showing that the entire return comes from the difference between purchase price and face value at maturity. Duration for zero-coupon bonds equals their time to maturity.