A bond calculator measures the present value of a bond’s cash flow (its futureinterest payments), and par value (the bond’s value upon maturity).
Now that you’re up to speed on Bond Rates, Yields and Pricing…let’s look at bond calculators and their different types.
What is a bond calculator?
A bond calculator measures the present value of a bond’s cash flow (its future interest payments), and par value (the bond’s value upon maturity). There are different things to measure such as accrued interest, yield to maturity, current yield, bond price on anniversary, T-bill price etc.
The interest that has accumulated on a bond since the last interest payment up to, but not including, the settlement date. This can be calculated on FINRA.
Yield to Maturity/Current Yield
The yield to maturity is the rate of return anticipated on a bond if it is held until the maturity date. The current yield is the annual income divided by the current price of the security. This measure looks at the current price of a bond instead of its face value. Both of these can be calculated on Money Chimp.
The price of a US Treasury Bill can be calculated if you have the annual interest rate and days to maturity. You can use Investopedia to calculate T-bill price.
There’s a lot to know about the bond market…a lot. If it interests you, check out our Investing in Different Markets course today for free!