Bond Dirty Price
Computes the dirty price of a bond: the clean price plus the interest accrued since the last coupon. The clean price is what shows up in quotes, but what actually changes hands at settlement is the dirty price, because the buyer has to reimburse the seller for the interest already run up. The tool works out the accrued interest on a linear basis and adds it to the clean price, returning both parts. Enter the clean price, the face value, the annual coupon rate, the coupon frequency, the days since the last coupon and the days in the period.
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Bond Dirty Price
Computes the dirty price of a bond: the clean price plus the interest accrued since the last coupon. The clean price is what shows up in quotes, but what actually changes hands at settlement is the dirty price, because the buyer has to reimburse the seller for the interest already run up. The tool works out the accrued interest on a linear basis and adds it to the clean price, returning both parts. Enter the clean price, the face value, the annual coupon rate, the coupon frequency, the days since the last coupon and the days in the period.
Why the screen price isn't what you pay
There's a classic fixed-income trap: the price shown in a bond's quote isn't the amount that leaves your account. The advertised price is the clean one, designed to compare paper without the noise of accumulated interest. But at settlement the dirty price kicks in, which adds the interest run up since the last coupon. That's what actually changes hands.
The logic is the same as accrued interest: the buyer reimburses the seller for the part of the coupon already earned. That's why the dirty price creeps up a little each day and drops sharply right after each coupon payment, when the clock resets. Understanding this sawtooth saves you the shock of seeing two different prices for the same bond and helps you compare offers honestly.
The tool does it all at once: enter the clean price, the face value, the coupon rate, the payment frequency and the days in the period. It returns the accrued interest and the final dirty price. As with any fixed-income calculation, the day count follows the simple linear convention used here, enough for most study and checking situations.
Related Tools
Bond Accrued Interest
Computes the accrued interest of a fixed-income bond, the slice of coupon that has built up since the last coupon payment up to the settlement date. It uses the linear (actual-days) convention, proportional to elapsed days: interest = face value × (coupon rate ÷ frequency) × (days elapsed ÷ days in period). This is the amount the buyer pays the seller on top of the price, because the whole coupon goes to whoever holds the bond on the payment date. Enter the face value, the annual coupon rate, the number of coupons per year, the days since the last coupon and the days in the period.
Bond Price from YTM
Computes the price of a coupon bond from its yield to maturity, discounting all future coupons and the face value to present: P = C·[1 − (1+i)^(−n)]/i + F·(1+i)^(−n). It's the inverse of computing the YTM and the foundation of fixed-income pricing. When the coupon exceeds the YTM, the bond trades at a premium; when below, at a discount. The calculation divides coupon and yield by the payment frequency. Enter the face value, the coupon rate, the YTM, the years and the coupons per year.
Vasicek Bond Price
Computes the price of a zero-coupon bond with the Vasicek model, the first short-rate interest-rate model with mean reversion. It describes the short rate oscillating around a long-run mean and yields a closed form for the bond price from four parameters: reversion speed, mean, volatility and current rate. Despite allowing negative rates, it's the foundation of the whole family of term-structure models. Enter the parameters and the maturity, and see the price and implied yield.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.