Bond Pricing

Bonds are priced based on their par value at maturity, coupon rate, years to maturity and the prevailing market interest rate. A bond's price is the sum of all upcoming coupon payments, par value and compound interest divided by the prevailing market interest rate for the remaining duration of the bond. The prevailing interest rate, or yield to maturity (YTM), is determined by other bonds trading in the market with the same credit rating and duration to maturity. You can use this calculator to visualize the hypothetical price of a bond at different interest rates / yield to maturities.