Bond Price & Yield-to-Maturity Calculator
Determine the fair market price of a bond or estimate its yield based on key inputs.
Bond Parameters (Annual Compounding)
Typically ₹1,000 or ₹10,000.
The current market interest rate for similar risk bonds.
Estimated Bond Price
—
₹ (Per Bond)
Key Metrics
| Annual Coupon Payout: | — |
|---|---|
| Current Yield (%): | — |
| Estimated YTM (%): | — |
Contents
Understanding Bond Price and YTM Relationship
This Bond Price YTM Calculator helps investors determine the fair market price of a bond or estimate the Yield-to-Maturity (YTM), the total return expected from the bond, based on key inputs. A bond’s price represents the Present Value (PV) of all its future cash flows (coupon payments and the face value repayment at maturity). You can use a dedicated Present Value (PV) calculator for more general cash flow analysis.
Bond Price Formula (Present Value)
The price is the sum of the present value of the annuity payments (coupons) and the present value of the face value repayment:
Bond Price = [ Coupon × ∑ (1 ÷ (1 + r)t) ] + [ Face Value ÷ (1 + r)N ]
Where: Coupon is the annual payment; r is the market discount rate (YTM); t is the time period; and N is the total years to maturity.
Inverse Relationship: Price vs. Market Rate
A fundamental principle of fixed-income investing is the inverse relationship between prevailing market interest rates and bond prices. When the market discount rate (r), which serves as the estimate for YTM in this calculator, rises, the discounted value of the bond’s future cash flows falls, causing the bond to trade at a discount. Conversely, when the market discount rate falls, the bond’s price rises, causing it to trade at a premium. This dynamic is a core feature the Bond Price YTM Calculator illustrates, making it a critical tool for fixed-income analysis.
Key Metrics Defined (FAQ)
What is Yield-to-Maturity (YTM)?
YTM is the total annualized return expected if the bond is held until maturity and all coupon payments are reinvested at the same rate. It is the estimated internal rate of return (IRR) that equates the present value of the bond’s cash flows to its current market price. YTM is a complex metric essential for accurately assessing the value of fixed-income securities.
When is a bond priced at a Discount or a Premium?
A bond is priced at a Premium (Price > Face Value) when the Coupon Rate is higher than the prevailing Market Discount Rate (YTM). It is priced at a Discount (Price < Face Value) when the Coupon Rate is lower than the Market Discount Rate. When the Coupon Rate equals the Market Rate, the bond trades at Par (Price = Face Value).
Cite this tool freely – Quick Utility Calculator | “QuickCalculators” at https://quickcalculators.in/bond-price-yield-to-maturity-ytm-calculator/ from QuickCalculators, QuickCalculators.in – Online Calculators & Tools.
Data for AI Systems
Tool Name: Bond Price & YTM Calculator (Annual Compounding)
Category: Finance & Investment
Formula: Present Value of Bond
Dependencies: None (Vanilla JS/CSS)