Estimates only — not financial, tax, or professional advice.
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What it calculates: Estimated Price Change, Value Change, Estimated New Value.
Updated 5 June 2026 · Transparent assumptions
$700 off a $10,000 holding with a duration of seven
A modified duration of 7 means roughly a 7% price move per percentage point of yield. On $10,000 that is $700, leaving $9,300. Stating the risk in money rather than in duration years is what makes it actionable: a duration figure is abstract, a $700 loss is not.
The relationship is linear in both the position size and the yield move, so doubling either doubles the loss. A two-point rise on the same holding costs $1,400; the same one-point rise on a $100,000 holding costs $7,000.
Long-duration bonds fell further in 2022 than most equity drawdowns
Bonds were widely treated as the safe half of a portfolio until yields rose sharply from historic lows. A portfolio of long-dated government bonds with a duration near 17 lost close to a fifth of its value for each percentage point of yield rise, and the cumulative move that year produced losses without modern precedent in fixed income.
The lesson is that duration is the risk, not credit quality. Government bonds carry no default risk and enormous rate risk; a short-dated corporate bond can be far less volatile than a long-dated sovereign. Anyone holding bonds for safety should know the duration before assuming the position is defensive.
The same duration that costs $700 gains $700
The calculation is symmetric: enter a negative yield change and the position gains. That is the reason to hold duration deliberately rather than by accident — an investor expecting rates to fall is being paid to take the exposure, and one expecting a rise should be shortening it.
It is also why duration is a positioning choice rather than purely a risk to minimise. Matching duration to the horizon over which the money is needed makes the position insensitive to rates at that date, which is usually the right target for money with a known future use.
Convexity, curve shape and credit
This is duration alone, so it overstates losses and understates gains on large moves â real bonds are convex in the holder’s favour. For moves beyond a point or so, and for long bonds, the error is material.
It also assumes every maturity moves together. A steepening curve hurts long holdings more than the average move suggests, and a flattening one less. And a credit-sensitive bond can fall on spread widening while government yields are unchanged, which no duration figure will predict.
Sources & References
Figures on this page are checked against primary, authoritative sources. Links open in a new tab.
Bond YieldYield to maturity, current yield, and annual coupon income from price, face value, and coupon rate.
Bond LadderA ladder split into equal rungs, with the income each rung produces and the total across the ladder.
InvestmentProject lump-sum and regular-contribution growth, plan a goal, and solve future vs present value, with fees and inflation.
Regular InvestmentProject how regular monthly contributions grow over time — SIP-style investing, dollar-cost averaging, inflation-adjusted value, and long-term goals.
Returns are assumptions, not guarantees. Actual results may vary because of market performance, taxes, fees, inflation, and timing. This is an educational projection, not investment advice.
Published the calculator with its formula, worked example, assumptions, limitations and a bespoke guide, and added an automated formula test suite covering it.
Tested the first-order price-change estimate, the change in value and the resulting new value against the duration and yield move entered.
Tested that the value change scales linearly with both the holding size and the size of the yield move, and reverses sign with it.
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