Bond Calculator

Price a bond from its coupon, yield and maturity.

Index funds now hold the majority of American equity assets, so most investors own the market rather than pick within it, and the difference between a 0.03% and a 1% expense ratio compounds into a wide gap over decades. Dividends have supplied a substantial share of long-run total return.

Market performance is measured on total return — price change plus dividends — and the long-run figure usually quoted for a broad US stock index is near 10% a year before inflation, closer to 7% after it. That average hides steep drawdowns, and the order in which returns arrive matters as much as the average once money is being added or withdrawn.

Bond prices move inversely to yields.

A bond's price and yield move in opposite directions: when market yields rise above the coupon, the price falls until the return matches the market. Duration measures how sharply that happens, and a longer maturity means a larger price swing for the same change in yield.

A projection at a steady average return flatters a real portfolio, which rarely returns the same number twice: a run of poor years early on does lasting damage to a plan built on withdrawals.

Bond prices fall when yields rise, and a fund's stated yield is not a promise — it moves with the portfolio behind it. Concentration is the quieter risk: a handful of very large American companies now account for an outsized share of index return.

Bond Calculator sits with the rest of the library's finance work, and it rests on the same portfolio arithmetic the way a lender's disclosure or a bank statement does. Its answer is only as good as the assumptions standing behind it.

The quantities it works from — face value, annual coupon rate, yield to maturity, years to maturity and coupon frequency — are the ones a real portfolio question actually turns on, and each carries a convention of its own, set out below.

Money questions in America turn on the same few trade-offs: how long a balance is carried, what rate applies to it, and whether the money is being paid down or built up. Inflation sits behind all of them, since a figure that looks generous at today's prices buys less at tomorrow's, and comparisons across decades are made in real, inflation-adjusted terms.

American products also disclose their costs in prescribed ways, from the APR on a consumer loan to the annual percentage yield on a deposit account.