Fixed Income

Bond Pricing

Bond price = present value of future cash flows (coupons + principal). When rates rise, prices fall—the inverse relationship is fundamental to fixed income.

Face Value ($)

Coupon Rate (%)

Years to Maturity

Market Yield (%)

Coupon Frequency

Bond Price

Current Yield

The Mathematics

P = Σ(C/(1+r)ᵗ) + F/(1+r)ⁿ

How It Works

function bondPrice(face, couponRate, years, marketYield, freq) {
    const r = marketYield / freq;
    const periods = years * freq;
    const coupon = face * couponRate / freq;
    
    let pv = 0;
    
    // PV of coupon payments
    for (let t = 1; t <= periods; t++) {
        pv += coupon / Math.pow(1 + r, t);
    }
    
    // PV of face value at maturity
    pv += face / Math.pow(1 + r, periods);
    
    return pv;
}