For bonds, the face value (or Par Value) is the amount paid to the bond holder at maturity. to move to the previous field. The calculators provided on this website are for educational purposes only. Code to add this calci to your website Just copy and paste the below code to your webpage where you want to display this calculator. We must first determine the cash flows. There is in depth information on this topic below the tool. When the price of the bond is low the yield is high and vice versa. Yield to maturity can be mathematically derived and calculated from the formula. This calculator generates the output value of YTM in percentage according to the input values of YTM to select the bonds to invest in, Bond face value, Bond price, Coupon rate and years to maturity. Use shift-tab Press enter to calculate. A bond is a certificate issued by a government or a public company promising to repay borrowed money at a fixed rate of interest at a specified time. (2) What is the bond’s Modified Duration? Example of using the Bond Duration Calculator. You can easily calculate the bond duration using the Bond Duration Calculator. Once you calculated the Macaulay duration, you'll be able to use the formula below in order to derive the Modified Duration (ModD): The Modified duration is therefore =  1.839. Remember, this yield assumes that all payments are paid on time and the bond is held to maturity. Yield to Maturity is the index for measuring the attractiveness of bonds. Typically, the face value of a UK bond is 100£ and $1,000 for a US bond. The more you use the bond value calculator, the more it should become clear that the effects that changing interest rates have on the price of a bond tend to become less and less the closer it gets to its maturity date. What formula is used? (2) What is the bond’s Modified Duration? YTM deals only with the time-value-of-money calculations between the price, coupons and face value of the bond at hand, not with other potential future investments. The term Yield to Maturity also called as Redemption Yield often abbreviated as YTM and used when it comes to bond funds, is defined as the rate of return obtained by buying a bond at the current market price and holding it to maturity. What is the Face Value? The Bond Duration Calculator can be used to derive the duration of a bond: (1) What is the bond’s Macaulay Duration? The formula used for calculations can be found here. What formula is used? The Bond Calculator can be used to calculate Bond Price and to determine the Yield-to-Maturity and Yield-to-Call on Bonds Bond Price Field - The Price of the bond is calculated or entered in this field. The formula used for calculations can be found here. Simply enter the following values in the calculator: Once you are done entering the values, click on the 'Calculate Bond Duration' button and you'll get the Macaulay Duration of 1.912 and the Modified Duration of 1.839: You can use the following formula to calculate the Macaulay Duration (MacD): For example, let's suppose that you have a bond, where the: Based on the above information, here are all the components needed in order to calculate the Macaulay Duration: Additionally, since the bond matures in 2 years, then for a semiannual bond, you'll have a total of 4 coupon payments (one payment every 6 months), such that: Pay special attention to the last period (t4=tn= 2 years) which requires both the coupon payment as well as the final principal repayment. Bond Calculator Instruction. What is a Bond? Now let’s take a look at how to calculate the bond’s yield to maturity. Future versions of this calculator will allow for different interest frequency. Online financial calculator to calculate yield to maturity based annual interest, par/face value, market price and years to maturity of bond. YTM Calculator. It is assumed that all bonds pay interest semi-annually. By continuing with ncalculators.com, you acknowledge & agree to our. Definition Face Value Field - The Face Value or Principal of the bond is calculated or entered in this field. If the coupons and face value are paid as promised the bond earns its yield-to-maturity. Bond Yield Formula. The YTM calculator has two parts, one is to calculate the current bond yield, and the other is to calculate yield to maturity.. Where the coupon payment refers to the total interest per year on a bond. This calculator generates the output value of YTM in percentage according to the input values of YTM to select the bonds to invest in, Bond face value, Bond price, Coupon rate and years to maturity. Every six months, the bond pays out coupons of $21, and the bondholder receives these payments for three years, which means there is a total of six coupon payments, i.e. This bond price calculator estimates the bond’s expected selling price by considering its face/par value, coupon rate and its compounding frequency and years until maturity. This is because the interest rate risk (risk of missing out on higher interest rates) decreases the closer bonds get to their maturity dates. Bond Price Calculator is a free online tool to calculate present value of bonds. The purpose of this calculator is to provide calculations and details for bond valuation problems. Following is the bond yield formula on how to calculate bond yield. When it comes to online calculation, this Yield to Maturity calculator can help you to determine the expected investment return of a bond according to the respective input values. Suppose that you have a bond, where the: Number of years to maturity is 2; Yield is 8%; Bond face value is 1000; Annual coupon rate is 6%; Payments are semiannually (1) What is the bond’s Macaulay Duration? YTM is beneficial to the bond buyer because a rising yield would decrease the bond price hence the same amount of interest is paid but for less money. YTM is therefore a good measurement gauge for the expected investment return of a bond. Yield to Maturity Calculator is an online tool for investment calculation, programmed to calculate the expected investment return of a bond. Typically, the face value of a UK bond is 100£ and $1,000 for a US bond. Tips: Use tab to move to the next field. Yield to Maturity Calculator is an online tool for investment calculation, programmed to calculate the expected investment return of a bond. Enter amount in negative value. For bonds, the face value (or Par Value) is the amount paid to the bond holder at maturity. Current Bond Yield (CBY) = F*C/P, where C = Bond Coupon Rate F = Bond Par Value P = Current Bond Price Let's now plug all those components within the MacD formula: MacD = 0.01496 + 0.02878 + 0.04151 + 0.05322 + 1.7740 = 1.912. You may refer to the following guide that further explains how to calculate the Bond Duration. Users shall be solely responsible when using the information/calculators provided on this website.