About this calculator
Enter the face value, coupon rate, years to maturity, payment frequency and the market yield.
How to use it
- Enter the face value and coupon rate.
- Enter years to maturity and how often interest is paid.
- Enter the market yield.
The formula
Price = Σ coupon ÷ (1 + y)t + face value ÷ (1 + y)n
- coupon
- face value × coupon rate ÷ payments a year
- y
- market yield per period
- n
- number of coupon payments left
Worked example
₹1,000 bond, 7.5% coupon paid half-yearly, 5 years, market yield 8%
- 10 coupons of ₹37.50 and ₹1,000 at the end, discounted at 4% per half-year.
- Price = ₹979.72, a discount because the market yield is above the coupon.
What the result means
Yields up, prices down. Longer bonds move more for the same change in yield.
Assumptions
- Valued on a coupon date; no accrued interest.
Limitations
- Between coupon dates, the quoted clean price excludes accrued interest.
- Credit risk is not modelled.
Frequently asked questions
Why do bond prices fall when yields rise?
New bonds pay the higher yield, so older ones must be cheaper to compete.
What is a premium bond?
One priced above face value, because its coupon is above the market yield.
Are RBI bonds and G-secs priced like this?
Yes, government securities use the same method, with half-yearly coupons.
For information only. This calculator gives estimates based on the figures you enter and the assumptions listed above. It is not financial advice. Actual amounts depend on the lender’s or institution’s terms, fees, rounding and rate changes. Please confirm with them before you decide.
Last reviewed on 1 October 2026. Found a mistake? Tell us.