wikiHow Bond Total Return Calculator To calculate bond total return, you need to take into account both the interest income received from the bond and any capital gains or losses from changes in the bond's market price. The formula to calculate the bond total return is: Total Return = (Interest Income + (Bond Price - Purchase Price)) / Purchase Price Where: * Interest Income: The total amount of interest payments received during the holding period of the bond. * Bond Price: The current market price of the bond. * Purchase Price: The price paid to purchase the bond. To calculate the interest income, you can use the formula: Interest Income = (Face Value x Coupon Rate x Time Held) / Days in the Year Where: * Face Value: The face value or par value of the bond. * Coupon Rate: The annual interest rate stated on the bond. * Time Held: The length of time that the bond was held, in days. * Days in the Year: The number of days in a year that the bond pays interest. To calculate the capital gains or losses, you need to subtract the purchase price from the current market price of the bond. If the market price has increased, the result will be a capital gain, and if it has decreased, the result will be a capital loss. Once you have both the interest income and capital gains or losses, you can use the formula above to calculate the bond total return. Note that this formula assumes that the bond is held to maturity and that all interest and principal payments are received on time. If the bond is sold before maturity, the actual total return may differ from the calculated return. Page