Us Bond Calculator

US Treasury Bond Price Calculator

Calculation Summary

Estimated Market Price:

Current Yield:

Total Coupon Payments:

Bond Status:

function calculateBond() { var face = parseFloat(document.getElementById('faceValue').value); var coupon = parseFloat(document.getElementById('couponRate').value) / 100; var ytm = parseFloat(document.getElementById('ytm').value) / 100; var years = parseFloat(document.getElementById('yearsToMaturity').value); var freq = parseInt(document.getElementById('frequency').value); if (isNaN(face) || isNaN(coupon) || isNaN(ytm) || isNaN(years)) { alert("Please enter valid numerical values."); return; } var periods = years * freq; var periodRate = ytm / freq; var periodCoupon = (face * coupon) / freq; // Bond Pricing Formula: PV of Coupons + PV of Par Value var price = 0; if (periodRate === 0) { price = (periodCoupon * periods) + face; } else { price = (periodCoupon * (1 – Math.pow(1 + periodRate, -periods)) / periodRate) + (face / Math.pow(1 + periodRate, -periods)); } var currentYield = ((face * coupon) / price) * 100; var totalInterest = (face * coupon) * years; var status = ""; if (price > face) { status = "Premium"; } else if (price < face) { status = "Discount"; } else { status = "Par"; } document.getElementById('resPrice').innerText = "$" + price.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resCurrentYield').innerText = currentYield.toFixed(3) + "%"; document.getElementById('resTotalInterest').innerText = "$" + totalInterest.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); document.getElementById('resStatus').innerText = status; document.getElementById('bond-results').style.display = 'block'; }

Understanding US Bond Valuations

A US Bond Calculator is an essential tool for fixed-income investors to determine the fair market value of Treasury securities. In the world of finance, bond prices and yields share an inverse relationship: when market yields rise, the price of existing bonds falls, and vice-versa.

Key Variables in Bond Calculation

• Face Value (Par): This is the amount the US Treasury promises to pay back to the bondholder at the end of the term. Most US Treasuries have a par value of $1,000.
• Coupon Rate: The fixed annual interest rate the bond pays. For example, a 5% coupon on a $1,000 bond pays $50 annually.
• Yield to Maturity (YTM): This is the total return anticipated on a bond if it is held until it matures. It is considered the market's required rate of return.
• Payment Frequency: While some international bonds pay annually, most US Treasury Notes and Bonds pay semi-annually (twice a year).

How to Interpret Results

If the Market Price is higher than the Face Value, the bond is trading at a Premium. This happens when the bond's coupon rate is higher than the current market yield. Conversely, if the price is lower than the face value, it is trading at a Discount, typically because the coupon rate is lower than what the market currently demands.

Practical Example

Imagine you are looking at a 10-year US Treasury Note with a 4.0% coupon. If the current market Yield to Maturity (YTM) is 3.5%, the bond is more attractive than the market average. Using the calculator, you would see that the price rises above $1,000 (roughly $1,041.50). If the YTM jumped to 4.5%, the price would drop below par (roughly $960.44), as investors demand a discount to buy a bond with a lower-than-market coupon.

Pro Tip: For short-term US Treasury Bills (T-Bills), there is no coupon. They are sold at a discount and pay the full face value at maturity. For those instruments, set the Coupon Rate to 0 in the calculator to see the discount price.