Bond price: Why a Bond’s Price Changes with Yield
A bond price discounts its coupon payments and final principal using the required yield per period. Increasing that yield reduces the modeled value of fixed future payments.
Use the Bond price Calculator to enter your own figures and compare the result with the worked example below.
Bond price formula
Price = Σ[Coupon ÷ (1+y)^t] + Face value ÷ (1+y)^n
Worked example
| Item | Example value |
|---|---|
| Face value | 1000 USD |
| Coupon per period | 50 USD |
| Yield per period | 4 % |
| Number of periods | 10 periods |
| Bond price | 1,081.108958 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Match coupon frequency with yield periods. This simplified price is not a live quote and may exclude accrued interest or embedded options.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.