Use the Bond Present Value Calculator to compute the present value of a bond.
Face Value is the value of the bond at maturity.
Annual Coupon Rate is the yield of the bond as of its issue date.
Annual Market Rate is the current market rate. It is also referred to as discount rate or yield to maturity. If the market rate is greater than the coupon rate, the present value is less than the face value. If it is less than the coupon rate, the present value is greater than the face value. If the two rates are the same, the present value is the same is the face value.
Years to Maturity is number of years until the face value of the bond is paid in full.
Payment interval is Annual, Semiannual, Quarterly or Monthly. The calculator adjusts the payment value, discount rate and number of payments to reflect the selected payment interval. For example, assume a semiannual payment interval is applied to the default values on the form. The adjusted payment is $200, the adjusted discount rate is 2% and the number of payments is 20.
Computational Notes
The calculator, uses the following formulas to compute the present value of a bond:
Present Value Paid at Maturity = Face Value / (Market Rate/ 100) ^ Number Payments
Present Value of Interest Payments = Payment Value * (1 - (Market Rate / 100) ^ -Number Payments) / Number Payments)
Present Value of Bond = Present Value Paid at Maturity + Present Value of Interest Payments
AI (ChatGPT)
Copyright © Richard A. Howard. All rights reserved.