Bond Calculator

About This Bond Calculator

Our Bond Calculator is an essential tool for investors, financial analysts, and students eager to determine the fair value of a bond. Whether you're a beginner searching for a simple online bond price calculator or a pro needing a clean price and accrued interest bond calculator, this tool serves every need. It offers two distinct calculation methods to cater to various financial scenarios.

1. Bond Price Calculator (Simplified)

This calculator (Version 1) determines the bond price assuming it's traded on a coupon payment date. This simplifies the calculation by avoiding accrued interest, focusing purely on the present value of all future coupon payments and the bond's face value. It’s ideal for those learning the bond valuation formula with example or trying to calculate bond price manually.

The formula used for this calculation is:

Where:

• $P$ = Bond Price
• $C$ = Coupon payment per period ($F \times \text{Coupon Rate} / \text{Payments per Year}$)
• $F$ = Face Value (Par Value) of the bond
• $r$ = Required yield per period ($\text{Annual Yield} / \text{Payments per Year}$)
• $N$ = Total number of periods until maturity ($\text{Maturity Years} \times \text{Payments per Year}$)
• $t$ = Time period in which the cash flow is received

2. Clean Price Calculator (Advanced)

This calculator (Version 2) provides a more accurate bond valuation by considering the settlement date and accrued interest. In real-world bond trading, bonds are rarely traded exactly on a coupon payment date, meaning the buyer owes the seller the interest accrued since the last coupon payment. This version calculates the Full (Dirty) Price and then subtracts the Accrued Interest to arrive at the Clean Price. Perfect for those looking to calculate accrued interest on bond or use a bond full price calculator.

The key formulas involved are:

Full (Dirty) Price: This is the actual price paid by the buyer, including accrued interest.

Where:

• $P_{dirty}$ = Full (Dirty) Price
• $C_p$ = Coupon payment per period ($F \times \text{Coupon Rate} / \text{Payments per Year}$)
• $F$ = Face Value
• $r_p$ = Required yield per period ($\text{Annual Yield} / \text{Payments per Year}$)
• $m$ = Number of remaining coupon periods until maturity
• $f$ = Fraction of the current coupon period remaining until the next coupon payment. Calculated as $\frac{\text{Days until next coupon}}{\text{Days in current coupon period}}$

Accrued Interest ($AI$): The interest earned by the seller from the last coupon date up to, but not including, the settlement date.

Clean Price ($P_{clean}$): The quoted price of a bond, excluding accrued interest. This is the price usually reported in financial news.

Both calculators factor in various payment frequencies (annual, semi-annual, quarterly, monthly) to provide accurate valuations. The advanced calculator also incorporates different day-count conventions for precise accrued interest calculations, making it a robust tool for detailed bond analysis. Whether you need a bond calculator with multiple payment frequency or want to calculate bond value with day count convention, this tool is optimized for accuracy and flexibility.