Worked example: Bond Calculator
Par bond. This fixed reference example shows one complete scenario; the interactive results above use your current inputs.
View the example inputs
- Face value
- 1000 $
- Purchase price
- 1000 $
- Annual coupon rate
- 5 %
- Years to maturity
- 5 years
- Coupons per year
- Semiannual
| Calculated quantity | Example result |
|---|---|
| Nominal annual yield to maturity | 5 % |
| Current yield | 5 % |
| Coupon payment | $25.00 |
Reading growth and return scenarios
Separate a rate from its compounding convention
An annual effective return already describes a full year of growth. A nominal annual rate needs its compounding frequency to determine the effective growth. A quoted APY, a nominal interest rate and an arithmetic average return are therefore not interchangeable inputs. Use the convention named in the form.
Contributions change both the final balance and how much money you have put in. Compare growth with total contributions rather than calling the entire final balance profit. Timing matters: a beginning-of-period deposit earns growth for an extra period compared with an otherwise equal ending deposit.
Interpret projections as conditional arithmetic
A constant-return projection answers what would happen if the entered assumptions held. It does not model market volatility or establish a future return. Tax, product fees, withdrawals and inflation may change the result unless they are explicitly included.
When a term chart is shown, each point recalculates the same model for a different term. Change one assumption at a time and compare results using a consistent currency, return convention and time horizon.
Formula and calculation method
YTM discounts equally spaced coupons plus redemption at face value to the entered price. Nominal annual YTM=period yield×coupon frequency.
Assumes no default, call, accrued interest, transaction costs or tax. Term must contain whole coupon periods.
Reference Sources
Frequently asked questions
How does this calculator work?
YTM discounts equally spaced coupons plus redemption at face value to the entered price. Nominal annual YTM=period yield×coupon frequency.
What assumptions should I check?
Assumes no default, call, accrued interest, transaction costs or tax. Term must contain whole coupon periods.
Can I save or print this calculation?
Use Copy link with inputs to reproduce the scenario, Download results for a text record, or Print. Where a schedule is shown, its CSV download includes every row.