- Bond price
- 100
- Macaulay duration
- 4.4854 years
- Modified duration
- 4.376
- Convexity
- 22.6123
The same regular bond is repriced at each displayed annual yield; face value and cash flows stay fixed. This is an illustrative example.
View the chart values
| Series | Annual yield (%) | Bond price |
|---|---|---|
| Bond | 3 | 109.22218 |
| Bond | 3.5 | 106.82592 |
| Bond | 4 | 104.49129 |
| Bond | 4.5 | 102.21655 |
| Bond | 5 | 100 |
| Bond | 5.5 | 97.839981 |
| Bond | 6 | 95.734899 |
| Bond | 6.5 | 93.683204 |
| Bond | 7 | 91.683395 |
How the price is calculated
A regular fixed-rate bond pays a coupon each period and returns its face value with the final coupon. Discount each payment using the yield per coupon period, then add the present values. Coupon rate determines the cash flow; yield determines how that cash flow is discounted. These inputs play different roles even when the rates happen to be equal.
Keep the periods consistent
For semiannual payments, divide both the annual coupon rate and the annual yield by two and count two coupon periods per year. The tool requires a whole number of regular coupon periods and nonnegative yields. It prices at a coupon date, so no accrued-interest adjustment is included.
| Input | Meaning |
|---|---|
| Face value | Principal repaid at maturity |
| Coupon rate | Annual coupon as a percentage of face value |
| Annual yield | Nominal annual yield with the chosen coupon frequency |
| Payments per year | Regular payments: 1, 2, 4 or 12 |
Interpret the result
At an annual coupon rate and matching annual yield of 5%, the default five-year bond prices at its face value of 100. Raising only the yield lowers the price because the promised cash flows have not increased. Lowering only the yield raises the price. The chart holds those cash flows fixed while changing the discount rate.