Calculate A Zero Coupon Bond

Zero Coupon Bond Calculator




Introduction & Importance

Zero-coupon bonds are debt securities that do not pay interest periodically. Instead, they are issued at a deep discount to their face value and redeemed at maturity for the full face value…

How to Use This Calculator

  1. Enter the face value of the bond.
  2. Enter the discount rate.
  3. Enter the number of years to maturity.
  4. Click ‘Calculate’.

Formula & Methodology

The formula to calculate the present value of a zero-coupon bond is:

PV = FV / (1 + r)^n

Where:

  • PV is the present value (what you pay now)
  • FV is the face value (what you get back)
  • r is the discount rate
  • n is the number of years
A detailed graph showing zero-coupon bond's present value over time A comparison of zero-coupon bonds and coupon bonds

Learn more about real interest rates from the U.S. Treasury

Understand bonds in detail from Investopedia

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