Bond Calculator

A treasury bond is a short-term (usually up to 1 year) government borrowing instrument. It is sold at a price below its face value and paid at face value at maturity. The difference is the investor's return.

Bond yield is calculated by dividing the difference between the face value and purchase price by the purchase price. For annual yield, this ratio is converted to 365 days based on the maturity day count.

The discount rate is the percentage showing how much below the face value the bond is sold. A higher discount rate offers higher return potential for the investor.