Modified Duration Calculator

✖Macaulay Duration is the weighted average time until cash flows are received.ⓘ Macaulay Duration [Macaulay_dur]			+10% -10%
✖Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until the end of its lifetime.ⓘ Yield to Maturity (YTM) [YTM]			+10% -10%
✖Coupon Periods refers to the annual interest paid on a bond.ⓘ Coupon Periods [n]			+10% -10%

✖Modified Duration, a formula commonly used in bond valuations, expresses the change in the value of a security due to a change in interest rates.ⓘ Modified Duration [MD]

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Formula

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Modified Duration

Formula

`"MD" = "Macaulay"_{"dur"}/(1+"YTM"/"n")`

Example

`"0.285714"="2"/(1+"12"/"2")`

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Modified Duration Solution

STEP 0: Pre-Calculation Summary

Formula Used

Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods)
MD = Macaulay_dur/(1+YTM/n)
This formula uses 4 Variables

Variables Used

Modified Duration - Modified Duration, a formula commonly used in bond valuations, expresses the change in the value of a security due to a change in interest rates.
Macaulay Duration - Macaulay Duration is the weighted average time until cash flows are received.
Yield to Maturity (YTM) - Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until the end of its lifetime.
Coupon Periods - Coupon Periods refers to the annual interest paid on a bond.

STEP 1: Convert Input(s) to Base Unit

Macaulay Duration: 2 --> No Conversion Required
Yield to Maturity (YTM): 12 --> No Conversion Required
Coupon Periods: 2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

MD = Macaulay_dur/(1+YTM/n) --> 2/(1+12/2)

Evaluating ... ...

MD = 0.285714285714286

STEP 3: Convert Result to Output's Unit

0.285714285714286 --> No Conversion Required

FINAL ANSWER

0.285714285714286 ≈ 0.285714 <-- Modified Duration

(Calculation completed in 00.004 seconds)

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Created by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 22 Business Calculators

Macaulay Duration

Go Macaulay Duration = sum(x,1,5,Cash Flow Number,((Cash Flow/(1+Yield to Maturity (YTM)/Compounding Periods))^Cash Flow Number))*(Time in Years/Present Value)

Weighted Average Cost of Capital

Go Weighted average cost of capital = ((Market value of the firm’s equity/Firm Value)*Cost of Equity)+(((Market Value of the Firm’s Debt/Firm Value)*Cost of Debt)*(1-Corporate Tax Rate))

Total Inventory Cost

Go Total Inventory Cost = Carrying cost per unit per year*(Quantity of Each Order/2)+Fixed cost per order*(Demand in units per year/Quantity of Each Order)

Acid Test Ratio

Go Acid Test Ratio = (Cash+Accounts Receivable+Short Term Investments)/Current Liabilities

Economic Order Quantity

Go Economic Order Quantity = ((2*Fixed cost per order*Demand in units per year)/Carrying cost per unit per year)*(1/2)

Return on Capital Employed

Go Return on capital employed = (Earnings Before Interest and Taxes/(Total Assets-Current Liabilities))*100

Diluted Earnings per Share

Go Diluted Earnings per Share = Net Income/(Average Shares+Other Convertible Securities)

Inventory Shrinkage

Go Inventory Shrinkage = ((Recorded Inventory-Actual Inventory)/Recorded Inventory)*100

Modified Duration

Go Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods)

Target Inventory Investment

Go Target Inventory Investment = Projected Annual Cost of Goods Sold from Stock Sales/Target Inventory Turnover

Retention Ratio

Go Retention Ratio = (Net Income-Dividend)/Net Income

Contribution Margin per Unit

Go Contribution Margin per Unit = Sales Price per Unit-Variable Cost per Unit

Operating Expense Ratio

Go Operating Expense Ratio = (Operating Expense/Gross Operating Income)*100

Break-Even Point

Go Break Even Point = Fixed Costs/Contribution Margin per Unit

Estimated Earnings

Go Estimated Earnings = Forecasted Sales-Forecasted Expense

Debt Coverage Ratio

Go Debt Coverage Ratio = Net Operating Income/Debt Service

Dividends Per Share

Go Dividends Per Share = Total Dividends/Number of Shares

Solvency Ratio

Go Solvency Ratio = (Shareholders Fund*100)/Total Assets

Estimate at completion

Go Estimate at Completion = Actual Cost+Bottom up ETC

Percentage off

Go Percentage Off = 1-(Selling Price/Original Price)

Preferred Stock

Go Preferred Stock = Dividend/Discount Percentage

Days in Inventory

Go Days in Inventory = 365/Inventory Turnover

Modified Duration Formula

Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods)
MD = Macaulay_dur/(1+YTM/n)

What is Modified Duration?

Modified Duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Modified duration follows the concept that interest rates and bond prices move in opposite directions. This formula is used to determine the effect that a 100-basis-point (1%) change in interest rates will have on the price of a bond

How to Calculate Modified Duration?

Modified Duration calculator uses Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods) to calculate the Modified Duration, Modified Duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates. Modified Duration is denoted by MD symbol.

How to calculate Modified Duration using this online calculator? To use this online calculator for Modified Duration, enter Macaulay Duration (Macaulay_dur), Yield to Maturity (YTM) (YTM) & Coupon Periods (n) and hit the calculate button. Here is how the Modified Duration calculation can be explained with given input values -> 1.142857 = 2/(1+12/2).

FAQ

What is Modified Duration?

Modified Duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates and is represented as MD = Macaulay_dur/(1+YTM/n) or Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods). Macaulay Duration is the weighted average time until cash flows are received, Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until the end of its lifetime & Coupon Periods refers to the annual interest paid on a bond.

How to calculate Modified Duration?

Modified Duration is a formula that expresses the measurable change in the value of a security in response to a change in interest rates is calculated using Modified Duration = Macaulay Duration/(1+Yield to Maturity (YTM)/Coupon Periods). To calculate Modified Duration, you need Macaulay Duration (Macaulay_dur), Yield to Maturity (YTM) (YTM) & Coupon Periods (n). With our tool, you need to enter the respective value for Macaulay Duration, Yield to Maturity (YTM) & Coupon Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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