Valuation

Calculate the present value of bonds based on market interest rates.

Face Value:

Maturity:

Coupon Yield (%):

4.50

$Present Value formula: PV = C × (1 - (1+r)^(-n)) / r + F × (1+r)^(-n)$

$PV$ = Present Value $C$ = Coupon Payment $r$ = Market Interest Rate $n$ = Years to Maturity $F$ = Face Value

The formula is used to calculate the Net Present Value of a bond, which is the discounted internal rate of return of its future cash flows.

The graph shows the par value bonds at the dashed vertical line. To the left of this are the premium bonds and to the right are the discount bonds.

Bonds with higher maturities are more sensitive to changes in interest rates. Explore this with the pin feature!