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Effective Duration Calculator
Estimate a bond’s effective duration — a measure of how sensitive its price is to interest rate changes.
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What is Effective Duration?
Effective duration estimates how much a bond’s price would change for a given shift in interest rates, taking into account bonds with embedded options or uncertain cash flows, unlike simpler duration measures.
The Formula
Effective Duration = (Price if Yield Decreases – Price if Yield Increases) ÷ (2 × Initial Price × Change in Yield). It’s calculated by observing how the bond’s price changes when the yield is shocked up and down by a small equal amount.
Note: This tool is for general educational and planning purposes only, not investment advice.
Last reviewed August 2026