Bond Details
Face value, coupon rate, and payment frequency
Market & Maturity
Current price, rate, and time to maturity
Bond Pricing
Your Market Price
$1,050
Calculated Fair Price
$1,040
Premium Bond
Fair value is $40 above par because coupon (5%) > market rate (4.5%)
Price vs Yield Curve
This curve shows the inverse relationship between bond prices and yields. As yields rise, bond prices fall.
Cumulative Interest Income
Interest Rate Sensitivity
| Market Rate | Bond Price | Price Change | Status |
|---|---|---|---|
| 3% | $1,172 | +17.2% | Premium |
| 4% | $1,082 | +8.2% | Premium |
| 5% | $1,000 | +0.0% | Premium |
| 6% | $926 | -7.4% | Discount |
| 7% | $858 | -14.2% | Discount |
Duration of 8.04 years means a 1% rate increase causes approximately 8.0% price drop.
Bond Analysis
Fair Price
$1,040
at 4.5% market rate
Yield to Maturity
4.38%
Total return if held
What if market rates changed to
See how interest rate changes affect your bond's price and yield
Personalized Insights
2 insights based on your inputs
Premium Bond
Your bond trades $40 (4.0%) above par value because your coupon rate (5%) exceeds the market rate (4.5%).
High Interest Rate Risk
With a duration of 8.0 years, a 1% rate increase would drop your bond's price by approximately 7.9%.
Related Calculators
Explore other tools that might help
Frequently Asked Questions
What is yield to maturity (YTM)?
YTM is the total return if you hold the bond until maturity, assuming all coupon payments are reinvested at the same rate. It accounts for current price, face value, coupon rate, and time to maturity. YTM is the most comprehensive measure of bond return.
How do bond prices relate to interest rates?
Bond prices move inversely to interest rates. When rates rise, existing bond prices fall (their fixed coupons are less attractive). When rates fall, bond prices rise. Longer-duration bonds are more sensitive to rate changes than shorter ones.
What is bond duration?
Duration measures a bond's sensitivity to interest rate changes. A duration of 5 years means a 1% rate increase causes roughly a 5% price drop. Longer maturity and lower coupon rates increase duration. Modified duration adjusts for yield.
What is the difference between coupon rate and yield?
Coupon rate is the annual interest payment as a percentage of face value (fixed when issued). Current yield is annual coupon divided by current price. YTM includes capital gain/loss if held to maturity. All three can differ significantly.
Are municipal bonds tax-free?
Municipal bond interest is generally exempt from federal income tax. If issued in your state, often exempt from state/local tax too. However, capital gains are taxable, and some munis may trigger AMT. The tax-equivalent yield can be significantly higher.
How this works
Bond price is the present value of coupon + principal cash flows discounted at yield-to-maturity: P = Σ C/(1+y/n)^k + F/(1+y/n)^(n×t). Duration is computed as modified Macaulay duration for interest-rate sensitivity.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
- [2]US Securities and Exchange Commission (SEC)Official sourcesec.govAccessed Apr 21, 2026
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).