Calculate yield to maturity, current yield, duration, and convexity for any bond. Visualize the price-yield relationship and compare bonds side by side.
Enter two bonds to compare their yields, duration, and risk profiles.
Given a target yield to maturity, calculate the fair price you should pay for a bond.
Current yield only tells you about income — it ignores capital gains or losses at maturity. A bond bought at $900 with a 5% coupon has a current yield of 5.56%, but the $100 gain at maturity significantly boosts the true return. Yield to maturity captures both coupon income and the price difference, making it the gold standard for bond comparison. Always use YTM when deciding between bonds with different prices, coupons, and maturities.
Modified duration tells you exactly how much your bond's price will move for a 1% change in yields. A bond with modified duration of 8 will drop roughly 8% if rates rise 1%. In a rising rate environment, shorter-duration bonds lose less value. In a falling rate environment, longer-duration bonds gain more. Duration is the single most important risk metric for bond portfolios — more useful than maturity alone because it accounts for the timing and size of all cash flows.
When a bond trades above par (premium), the market is saying its coupon is higher than current yields demand — you're paying extra for above-market income. When it trades below par (discount), the coupon is below market rates. Neither is inherently better: premium bonds provide more current income but lose value at maturity, while discount bonds provide less income but gain value. The YTM equalizes these tradeoffs, which is why two bonds with different prices and coupons can have identical YTMs.
Yield to maturity is computed using Newton's method (Newton-Raphson iteration) to solve for the discount rate that equates the present value of all future cash flows (coupons + face value) to the bond's current market price. The algorithm converges to a solution within 100 iterations at a precision of 1e-8.
Macaulay duration is the weighted average time to receive cash flows, where weights are the present values of each cash flow divided by the bond price. Modified duration equals Macaulay duration divided by (1 + yield/frequency). Convexity is the second derivative of the price-yield function, measuring the curvature of the price response to yield changes.