Bond/Loan Present Value Calculator - Compute the Initial Value of a Bond Based on a Predetermined Face Value

Step-by-Step Instructions:

1. Enter the Face Value ($): Input the predetermined maturity value of your bond or the final amount you want to achieve. This is what the investment will be worth at the end of the term.
2. Set the Annual Interest Rate (%): Enter the expected annual rate of return. For government bonds, you can reference current Treasury rates. For other investments, use your expected yield.
3. Define the Investment Term: Specify how long you plan to hold the investment using the years and months fields. The calculator supports fractional years for precise calculations.
4. Select Compounding Method: Choose how frequently interest compounds:
   • Yearly: Interest compounds once per year
   • Semi-annually: Twice per year (common for many bonds)
   • Quarterly: Four times per year
   • Monthly: Twelve times per year (common for savings accounts)
   • Daily: 365 times per year (high-yield savings)
   • Continuous: Mathematical limit of infinite compounding
5. Review Results: The calculator instantly shows your required present value investment and total interest earned over the term.