How to Calculate the Bond Duration (example included)

In this short post, you’ll see how to calculate the bond duration. More specifically, you’ll see how to calculate the: Macaulay duration; and Modified duration To start, here is the formula that you can use to calculate the Macaulay duration (MacD): (t1*FV)(C) (tn*FV)(C) (tn*FV) MacD = (m*PV)(1+YTM/m)mt1 + … + (m*PV)(1+YTM/m)mtn + (PV)(1+YTM/m)mtn Where: m = …