Bond Calculator (VND)
A bond is a fixed-term loan you make to an issuer — a company or a government. You pay a price up front, collect a fixed coupon at regular intervals, and at maturity the issuer returns the face value (par). If you live and work in Vietnam and think in dong, the question that matters when buying a bond on the secondary market is simple: given that fixed schedule of cash flows, what is it worth today? The answer is the present value of every future coupon plus the present value of the face value repaid at maturity — each discounted back at the yield the market currently demands.
The single most important idea is that bond prices move inversely to yields. When the market yield is higher than the coupon rate, nobody will pay full face value for a bond that pays below-market interest, so it trades at a discount (below par). When the yield is lower than the coupon, the bond is attractive and trades at a premium (above par). Under an illustrative assumption of an 8% coupon and a 9% required yield, a 100.000.000 VND face value bond with 5 years to maturity is worth only 96.110.349 VND — a discount of 3.889.651 VND to par — precisely because the 8% coupon is below the 9% the market wants.
The calculator above lets you enter the face value, coupon rate, required yield and years remaining, then instantly returns the bond price, the current yield (annual coupon divided by price), and the premium or discount to par. One caveat applies throughout: the coupon and yield figures in our examples are illustrative assumptions, not quotes. Real Vietnamese bond coupons, market yields and prices vary by issue, issuer and date — always check the prospectus and current market levels before committing money.
How the calculator prices a bond
The core formula
A bond's price is the present value of its future cash flows:
Price = Σ (C / (1 + y)^t) for t = 1…n, plus F / (1 + y)^n
| Symbol | Meaning |
|---|---|
| C | Annual coupon payment = coupon rate × face value (8% × 100.000.000 = 8.000.000 VND) |
| F | Face value repaid at maturity (100.000.000 VND) |
| y | Required yield / market yield as a decimal (9% = 0.09) |
| t | Year number, 1 through n |
| n | Years remaining to maturity (5) |
The calculator assumes annual coupons discounted annually — the same convention as the worked-example table below, so you can reconcile every number. Real bonds often pay semi-annually; in that case the number of periods and the per-period yield are adjusted accordingly.
Current yield
Current yield = annual coupon / price
This is the coupon income as a fraction of what you actually pay. When you buy at a discount, the price is below par, so the current yield is higher than the stated coupon: 8.000.000 ÷ 96.110.349 = 8.32%, above the 8% coupon. Note that current yield ignores the capital gain you realise when par is repaid at maturity — the complete measure for that is yield to maturity (YTM), which is exactly the y in the pricing formula above.
Why the price falls when yield > coupon (a discount)
- Yield > coupon → price < par (discount): the bond pays below-market interest, so its price must drop to compensate.
- Yield = coupon → price = par: the cash flows are exactly attractive enough; the price equals 100.000.000 VND.
- Yield < coupon → price > par (premium): the bond pays above-market interest, so buyers pay extra for it.
What the model leaves out
The model assumes a constant yield for the whole horizon, coupons paid evenly once a year, no taxes or transaction fees, and no default risk from the issuer. In reality market yields move continuously and some issuers carry meaningful credit risk. Treat the output as a theoretical valuation, not a promise of return.
Worked example: a 100.000.000 VND face value bond, 8% coupon, 5 years
Illustrative assumptions: a constant 9%/year required yield, coupons of 8.000.000 VND paid at the end of each year, and 100.000.000 VND of par repaid in year 5.
| Year (t) | Cash flow | Discount factor 1/(1.09)^t | Present value |
|---|---|---|---|
| 1 | Coupon 8.000.000 | 0.9174 | 7.339.450 |
| 2 | Coupon 8.000.000 | 0.8417 | 6.733.440 |
| 3 | Coupon 8.000.000 | 0.7722 | 6.177.468 |
| 4 | Coupon 8.000.000 | 0.7084 | 5.667.402 |
| 5 | Coupon 8.000.000 | 0.6499 | 5.199.451 |
| 5 | Face value 100.000.000 | 0.6499 | 64.993.139 |
| Total | 96.110.349 |
Summing every present value gives a bond price of 96.110.349 VND — exactly 3.889.651 VND below the 100.000.000 VND face value. That gap is the discount, and it exists because the 8% coupon is lower than the 9% required yield. The current yield at that price is 8.000.000 ÷ 96.110.349 = 8.32%.
Flip the scenario and the inverse relationship becomes obvious. If the market yield fell to 7% (below the 8% coupon), the same bond would be priced at 104.100.197 VND — a premium of 4.100.197 VND over par. And if the yield exactly equalled the 8% coupon, the price would return to par at 100.000.000 VND. This price-yield seesaw is the core risk bondholders manage: rising rates push existing bond prices down. To compare a bond against other opportunities, pair this with FiMo's present value and NPV calculators.
Frequently asked questions
How is a bond price calculated?
A bond's price is the present value of all its future cash flows: each annual coupon plus the face value repaid at maturity, all discounted back to today at the required yield. The formula is Price = Σ C/(1+y)^t + F/(1+y)^n. Worked example: a 100.000.000 VND face value bond with an 8% coupon, a 9% yield and 5 years to maturity prices at 96.110.349 VND.
Why does a bond trade below its face value?
Because its coupon rate is lower than the yield the market currently demands. The bond's fixed cash flows are less attractive than prevailing rates, so the price must fall below par to compensate buyers — this is a discount. With an 8% coupon and a 9% yield (illustrative), a 100.000.000 VND bond is worth only 96.110.349 VND, a 3.889.651 VND discount. Conversely, when the yield is below the coupon the bond trades at a premium above par.
What is the difference between coupon rate and yield?
The coupon rate is the fixed interest printed on the bond, calculated on face value — 8% of 100.000.000 VND is 8.000.000 VND a year, and it never changes. The yield is the actual return based on the price you pay, which moves with the market. Buy below par and the current yield (8.000.000 ÷ 96.110.349 = 8.32%) exceeds the 8% coupon; buy above par and it falls below the coupon.
What is current yield on a bond?
Current yield = annual coupon divided by the bond's price. It measures coupon income as a fraction of what you actually paid. Example: a 8.000.000 VND coupon on a price of 96.110.349 VND gives a current yield of 8.32%. It ignores the capital gain or loss realised when par is repaid at maturity — to capture that as well, use yield to maturity (YTM), which is the discount rate that makes the price formula balance.
When does a bond trade exactly at par?
A bond trades at par (exactly its face value) when the market's required yield equals the coupon rate. At that point the cash flows are precisely as attractive as prevailing rates — neither cheap nor expensive. In the illustrative example, if the yield equalled the 8% coupon, the price would return to 100.000.000 VND, equal to face value. A yield above the coupon produces a discount; a yield below it produces a premium.
What risks should I consider when buying Vietnamese corporate bonds?
The biggest is credit (default) risk: the issuer failing to pay coupons or principal. This calculator prices the promised cash flows and does not model default risk, so its output is a theoretical "if everything is paid in full" value. You also face interest-rate risk (rising yields push prices down) and liquidity risk. Read the prospectus, credit rating and any collateral carefully before buying — the figures on this page are illustrative assumptions only.