1. What is the 30 Year Treasury Bond?

The 30 Year Treasury Bond is a U.S. government debt security with a maturity of 30 years that pays interest semi-annually. It's considered one of the safest long-term investments and serves as a benchmark for other long-term interest rates.

2. How Does the Calculator Work?

The calculator uses the bond pricing formula:

Where:

• \( Coupon \) — Semi-annual coupon payment (USD)
• \( Yield \) — Yield to maturity (as decimal)
• \( Face \) — Face value of the bond (USD)
• \( t \) — Period number (1-60 for 30 years semi-annual)

Explanation: The formula calculates the present value of all future cash flows (coupon payments and face value at maturity) discounted at the bond's yield.

3. Importance of Bond Pricing

Details: Accurate bond pricing is essential for investors to determine fair value, assess investment opportunities, and manage fixed-income portfolios.

4. Using the Calculator

Tips: Enter the semi-annual coupon payment, yield as a percentage (e.g., 3.5 for 3.5%), and face value (typically $1000). All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: Why are there 60 periods in the calculation?
A: 30-year bonds pay interest semi-annually (twice per year), resulting in 60 total payment periods.

Q2: What's the relationship between yield and price?
A: Bond prices and yields move inversely - when yields rise, prices fall, and vice versa.

Q3: What is the typical face value for Treasury bonds?
A: The standard face value is $1,000, though they can be purchased in multiples of $100.

Q4: How does the coupon rate relate to the coupon payment?
A: The annual coupon payment is face value × coupon rate. For semi-annual payments, divide by 2.

Q5: What factors affect Treasury bond yields?
A: Inflation expectations, Federal Reserve policy, economic growth, and investor demand all influence yields.