# Calculate the Bond Price using Excel

In this guide, you’ll see how to calculate the bond price using Excel.

Here are the steps:

## Steps to Calculate the Bond Price using Excel

Let’s explore the process of calculating the following bond price using Excel:

• Number of years to maturity is 9
• Yield is 8%
• Bond face value is 1000
• Annual coupon rate is 6%
• Payments are semiannually

What is the bond price?

Here is the short version of the calculation to get the bond price:

The resulted bond price (cell B10) is (\$873.41):

### Detailed Step-by-Step Guide

To start, here we have a simple Excel template to calculate the bond price:

To calculate the bond price:

(1) In cell B1, enter the number of years until the bond matures – for example, 9 years:

(2) In cell B2, input the annual yield as 0.08, representing 8% in percentage terms:

(3) Cell B3 is for the face value of the bond, set at \$1,000:

(4) In cell B4, representing the annual coupon rate, input 0.06, equivalent to 6%.

(5) In cell B5, for semiannual payments, input 2:

(6) Moving to cell B6, calculate the total number of periods by multiplying the years in B1 by the payments per year in B5, resulting in 18 total periods:

(7) In cell B7, calculate the periodic semiannual yield by dividing the annual yield in B2 by the number of payments per year in B5, resulting in 0.04:

(8) Next, in cell B8, compute the periodic semiannual coupon rate by dividing the annual coupon rate in B4 by the number of payments per year in B5, yielding 0.03:

(9) Proceed to cell B9, where the periodic coupon payment is calculated by multiplying the face value of the bond, \$1,000 in B3, by the semiannual coupon rate, 0.03 in B8, resulting in \$30:

(10) In cell B10, utilize Excel’s present value function (‘=PV‘) to find the bond price. This function takes the periodic semiannual yield in B7, the total number of periods in B6, the periodic coupon payment in B9, and the face value in B3:

Upon hitting enter, view the calculated bond price in cell B10. This value represents the present value of future cash flows, providing the estimated bond price, which is (\$873.41):