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Use this calculator to test different bond transaction scenarios in Euros. By adjusting a number of values including price, coupon, and maturity, the calculator will calculate yields, convexity, cash flow and return as well as other results so you can learn the impact of changes in investment assumptions.
Enter the information requested under Required Values including Coupon Rate (enter the coupon rate, which is the annual interest rate for the bond, as a decimal, for example 5.25% is entered as 5.25) and Maturity date upon which the security matures (click on calendar icon and select date). Select either Price or Yield from the pull down menu under Given. Enter the appropriate value of either the Price or Yield you have chosen under Given into the Value box.
In addition, you can also enter Issue Date, First Coupon Date and Reinvestment Rate under Optional Information. It is not necessary to add this material for the calculator to provide results.
You can adjust the Coupon Frequency, Day Count Method and make End of Month Adjustments by using the pull down menus in the Adjust Settings section. Note that in calculating the accrued interest on a bond, the market and market makers use different day-count conventions which govern the both the number of days assumed to be in a calendar year and how the days between the two dates are calculated. Act/Act means actual days to next coupon payment/365 days; 30/360 assumes 30 days to the next coupon assuming 30 days in a month/360 in a year; and NASD and ISMA refer to day count conventions used by those organizations.
Once you have entered the information, click on Calculate to see the results. If you would like to change your input, you can click on Clear Values. The results of your calculation input will be displayed below. If you entered a Price for your bond, it will calculate the Yield. If you entered a Yield value, it will calculate the Price. In both cases it will also show the Accrued Interest.
The results will also show the Duration (effect that each 1% change in interest rates has on a bond’s market value); Modified Duration (a measure of the approximate change in bond price for a 1% or 100 basis point change in yield assuming the bond's expected cash flows do not change when the yield changes); Convexity (a measure of how sensitive a bond is to changes in interest rates); PV1B (the change in price corresponding to a change in yield of 0.01); and YV32 (the change in yield corresponding to a change in price of 1/32 (0.03125) for the bond you have calculated). It will calculate the Annual Yield, Income and Total Return in detail below.
If you would like to do another calculation, simply select the General Bond Calculator tab at the top of the page. You can then calculate results for a new set of assumptions.