The Accrued Interest Calculator for Bonds helps investors and traders determine the interest accumulated since the last coupon payment, ensuring fair compensation during bond transactions.
For a $10,000 bond at 5% semi-annual with a clean price of $9,850, the accrued interest 75 days into the coupon period is $102.46 — making the actual settlement price $9,952.46.
Why accrued interest matters in bond trading
When buying or selling bonds between coupon payment dates, the buyer must compensate the seller for interest earned since the last payment.
The accrued interest ensures fair value exchange — the seller gets paid for the days they held the bond, and the buyer receives the full next coupon payment.
For large transactions, even a few days' difference can mean thousands of dollars.
The formulas behind bond accrued interest
The calculator prorates the coupon payment based on the number of days elapsed in the current coupon period.
Coupon Payment = Face Value x (Annual Rate / 100) / Frequency
Days in Period = round(365 / Frequency)
Daily Accrual = Coupon Payment / Days in Period
Accrued Interest = Daily Accrual x Days Since Last Coupon
Dirty Price = Clean Price + Accrued Interest
Current Yield (%) = (Face Value x Annual Rate / 100) / Clean Price x 100
Here, Face Value is the bond's principal, Annual Rate is the yearly coupon rate, Frequency is payments per year, and Clean Price is the quoted market price excluding accrued interest.
Analyzing a $10,000 bond at 5% semi-annual
Consider a bond with $10,000 face value, 5% annual coupon paid semi-annually, a clean price of $9,850, and 75 days since the last coupon:
- Coupon Payment: $10,000 x (5/100) / 2 = $250.00 per period.
- Days in Period: round(365 / 2) = 183 days.
- Daily Accrual: $250 / 183 = $1.3661 per day.
- Accrued Interest: $1.3661 x 75 = $102.46 (75 of 183 days, 41.0% through period).
- Dirty Price: $9,850 + $102.46 = $9,952.46 (settlement price).
- Current Yield: ($500 / $9,850) x 100 = 5.08%.
The breakdown bar shows $9,850 in clean price against $102.46 in accrued interest.
The insights card details the coupon payment schedule, daily accrual rate, and period progress.
The chart visualizes how interest accrues linearly across the full 183-day coupon period, with a reference line marking the current position at day 75.
When bond accrued interest calculations have limitations
While straightforward, accrued interest calculations can have nuances in certain contexts.
- Day-Count Conventions: Different bond markets use different conventions (30/360, actual/360, actual/365, actual/actual). This calculator uses actual/365. Municipal and corporate bonds often use 30/360, which can produce slightly different results.
- Ex-Dividend Periods: Some bonds stop accruing interest for the buyer a few days before the coupon date (the "ex-date"). During this period, the buyer doesn't pay accrued interest because the seller will still receive the upcoming coupon.
- Irregular Coupon Periods: The first or last coupon period of a bond's life may be shorter or longer than standard. This calculator assumes regular periods based on the stated frequency.