How It Works
A bond is like a loan to a government or company. They agree to pay you interest over time and then return the full value of the bond. Here are some terms that can help you understand how they work:
- Bond Face Value: The full value of the bond that will be returned when it matures. One way to think of this is the original amount that was loaned to the company or government in exchange for the bond.
- Bond Price: The amount the bond owner spent on the bond. This is sometimes the same as the face value, but it can also be more or less.
- Coupon Interest Rate: The interest rate for the bond. So if you have a 10% coupon rate on $100, you'd earn $10 in interest.
- Maturity Date: The date when the original face value will be returned to the bond owner. The bond continues to earn interest until it matures (reaches the maturity date).
Bonds are safe and steady ways to grow your money over time. This calculator helps you estimate your total return.
Just enter the bond’s purchase price, interest rate, and time until maturity. The calculator will show you the total interest earned and how much you could get back at the end.
