.pv-bond-calculator-container .calculator-card {
background: #fdfdfd;
border: 1px solid #e0e0e0;
border-radius: 8px;
padding: 30px;
box-shadow: 0 4px 12px rgba(0,0,0,0.05);
margin-bottom: 40px;
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.pv-bond-calculator-container h2 {
color: #2c3e50;
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margin-bottom: 20px;
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display: block;
margin-bottom: 8px;
font-weight: 600;
color: #444;
}
.pv-bond-calculator-container input[type="number"],
.pv-bond-calculator-container select {
width: 100%;
padding: 12px;
border: 1px solid #ccc;
border-radius: 4px;
font-size: 16px;
box-sizing: border-box;
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color: white;
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padding: 20px;
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.pv-bond-calculator-container .article-content {
line-height: 1.6;
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.pv-bond-calculator-container .formula-box {
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}
function calculateBondPresentValue() {
// Get input values using var
var faceValueInput = document.getElementById('bondFaceValue').value;
var couponRateInput = document.getElementById('bondCouponRate').value;
var marketRateInput = document.getElementById('bondMarketRate').value;
var yearsInput = document.getElementById('bondYears').value;
var frequencyInput = document.getElementById('bondFrequency').value;
// Validate inputs
if (faceValueInput === "" || couponRateInput === "" || marketRateInput === "" || yearsInput === "") {
alert("Please fill in all fields to calculate the present value.");
return;
}
// Parse values
var F = parseFloat(faceValueInput); // Face Value
var annualCouponRate = parseFloat(couponRateInput) / 100;
var annualMarketRate = parseFloat(marketRateInput) / 100;
var years = parseFloat(yearsInput);
var freq = parseInt(frequencyInput);
// Edge case: Negative values
if (F < 0 || years <= 0 || freq F) {
status = "Trading at Premium";
statusColor = "#27ae60"; // Green
} else if (presentValue < F) {
status = "Trading at Discount";
statusColor = "#c0392b"; // Red
} else {
status = "Trading at Par";
statusColor = "#2980b9"; // Blue
}
// Calculate Quote (% of Par)
var quote = (presentValue / F) * 100;
// Display Results
document.getElementById('displayPV').innerHTML = "$" + presentValue.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('displayQuote').innerHTML = quote.toFixed(3) + "%";
document.getElementById('displayTotalCoupons').innerHTML = "$" + (couponPayment * totalPeriods).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
var statusElement = document.getElementById('displayStatus');
statusElement.innerHTML = status;
statusElement.style.color = statusColor;
// Show result box
document.getElementById('bondResult').style.display = 'block';
}
function clearBondCalculator() {
document.getElementById('bondFaceValue').value = '';
document.getElementById('bondCouponRate').value = '';
document.getElementById('bondMarketRate').value = '';
document.getElementById('bondYears').value = '';
document.getElementById('bondFrequency').value = '2';
document.getElementById('bondResult').style.display = 'none';
}
Bond Present Value Calculator
The annual interest rate paid by the bond issuer.
The required rate of return (YTM) in the current market.
Annually (1/year)
Semiannually (2/year)
Quarterly (4/year)
Monthly (12/year)
Present Value (Bond Price):
–
Bond Quote (% of Par):
–
Total Coupon Payments:
–
Status:
–
Understanding Present Value with Coupon Rate
The Present Value (PV) of a bond represents the theoretical fair price of a bond today, based on its future cash flows discounted by the current market interest rate. Bonds typically pay periodic interest, known as coupons, and return the principal (face value) at maturity.
This calculator determines the intrinsic value of a bond by summing the present value of all future coupon payments and the present value of the face value repayment. This valuation is critical for investors to determine if a bond is trading at a discount, a premium, or at par.
The Bond Valuation Formula
The value of a bond is calculated using the summation of the discounted future cash flows:
PV = C * [ (1 – (1 + r)^-n) / r ] + F / (1 + r)^n
Where:
- PV: Present Value (Current Bond Price)
- C: Coupon Payment per period (Face Value × Annual Coupon Rate ÷ Frequency)
- r: Market Interest Rate per period (Annual Market Rate ÷ Frequency)
- n: Total number of compounding periods (Years × Frequency)
- F: Face Value (Par Value)
How Coupon Rates Affect Bond Value
The relationship between the Coupon Rate and the Market Rate (Discount Rate) determines the bond's pricing status:
- Par Value Bond: If the Coupon Rate equals the Market Rate, the bond is valued at exactly its Face Value.
- Discount Bond: If the Coupon Rate is lower than the Market Rate, the bond trades below its Face Value. Investors pay less upfront to compensate for the lower interest payments.
- Premium Bond: If the Coupon Rate is higher than the Market Rate, the bond trades above its Face Value. Investors are willing to pay more for the higher interest payments compared to the current market.
Example Calculation
Imagine a bond with a $1,000 Face Value, a 5% Annual Coupon Rate, and 10 Years to Maturity. The current Market Rate (Yield to Maturity) is 4%, and the bond pays Semiannually.
- Coupon Payment (per period): $1,000 × 5% ÷ 2 = $25
- Market Rate (per period): 4% ÷ 2 = 2% (0.02)
- Total Periods: 10 years × 2 = 20 periods
Using these inputs, the calculator would determine the Present Value to be approximately $1,081.76. Since the coupon rate (5%) is higher than the market rate (4%), this is a Premium Bond.