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Using the example in the calculator, but with 45 days elapsed:ġ000 * (.1/2) * (45/180) = $12.50 The Dirty Price and Clean Price FormulasĪs in our yield to maturity calculator, this is a hard problem to do by hand. TP = Time between payments (from above description).If the slight error doesn't match the payments on your bond, we suggest you calculate them on your own using our guidelines but substituting for your inputs.Īnyway, this is what we are using for 'the time between payments' internally to the bond pricing calculator: The only trick is a shortcut due to the day count convention we assume here a round number of days for the various periods which don't exactly match the calendar. If you subtract this from the dirty price you get the clean price.Īccumulated interest on a bond is easy to calculate. Accrued Interest - For convenience, we have explicitly calculated the amount of the market price that is due to accrued interest.This calculation relies only on the difference between market price and the coupon rate of the bond.

Clean Price - Clean price is the price of the bond if accrued interest is ignored.If you aren't buying or selling a bond on the date it is making a payment that means there is some implied interest on the bond. It differs from the clean price because yield can be thought to 'compound continuously', but payments themselves only come periodically. Dirty Price - Dirty price is the actual predicted market trading price of the bond with characteristics matching the input.If it only pays out at maturity try the zero coupon bond calculator, although the tool can compute the market price too. Coupon Payout Frequency - How often the bond makes a coupon payment, per year.Days Since Last Payout - Enter the number of days it has been since the bond last issued a coupon payment into this field of the bond pricing calculator.You may use decimals here - 9 years and 6 months is 9.5 years, for example. Years to Maturity - The number of years remaining until the bond pays out the face value.Generally, this will be different than the actual coupon rate on a bond - see our bond yield to maturity calculator for more (this is essentially the inverse of this operation). Market Rate or Discount Rate - The market rate is the yield that could otherwise be received by buying another investment.In reverse, this is the amount the bond pays per year divided by the par value. Annual Coupon Rate - The annual coupon rate is the posted interest rate on the bond.Bond Face Value/Par Value - Par or face value is the amount a bondholder will get back when a bond matures.4.4 What's next? Using the Bond Price Calculator Inputs to the Bond Value Tool