Zero-Coupon Bond Calculator
Find the price of a zero-coupon bond from its yield, or the yield from its price, and see how its value accretes each year.
Quick answer
A zero-coupon bond pays no coupons, only face value at maturity. Price = face / (1 + y/m)^(m x n), where y is the yield, m the compounding periods per year and n the years. Yield = m x ((face / price)^(1/(m x n)) - 1).
Zero-Coupon Bond Calculator
Price
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Yield (nominal)
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Effective Annual Yield
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Total Discount (Interest)
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Total Return Over the Term
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Bond value rising towards face value
Accretion Schedule
| Year | Opening value (₹) | Implied interest (₹) | Closing value (₹) |
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Assumptions & method
- Price = F ÷ (1 + y ÷ m)^(m × n), with F face value, y nominal annual yield, m compounding periods per year and n years.
- Yield from price: y = m × ((F ÷ P)^(1 ÷ (m × n)) − 1). Effective annual yield = (1 + y ÷ m)^m − 1.
- Value at time t = P × (1 + y ÷ m)^(m × t). Implied interest for a year is the change in value over that year; a final part-year is shown if the term is not a whole number.
- Total discount = F − P. Total return = (F − P) ÷ P over the whole term.
- Market price changes before maturity, taxes, fees and issuer default are not included. Estimates only, not advice.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How zero-coupon bonds are priced
A zero-coupon bond makes a single payment, its face value, on the maturity date. Because there are no coupons, its price is the present value of that one payment, found by discounting at the required yield. A higher yield, or a longer wait, means a lower price today. The reverse calculation finds the yield you earn if you pay a given price and hold to maturity. Although no cash is paid in between, the bond's value grows towards face value each year, and this accretion is the implied interest shown in the schedule.