A bond’s par value, or face value, is the amount of money a bond issuer agrees to repay a bondholder when the bond matures, or comes due. A bond’s market price may differ from its par value if market interest rates differ from the bond’s interest rate. Financial newspapers and websites typically quote a bond’s price as a percentage of its par value. For example, if a bond’s price is quoted as 102, its price is 102 percent of its par value. If its price is quoted as 100, its price is equal to its par value.

1. Determine from your investment broker or dealer a particular bond’s par value. Corporate bonds typically have a par value of $1,000, while the par values of other types of bonds, such as U.S. Treasury bonds, can vary. For this example, assume a bond’s par value is $1,000.

2. Determine from your broker the price of the bond in dollars. In this example, assume the bond’s price is $975. Because this bond’s price is less than its par value, it is selling for a discount. If its price were higher than its par value, it would be selling for a premium.

3. Divide the bond’s price by its par value. Continuing the example, divide $975 by $1,000 to get 0.975.

4. Multiply your result by 100 to calculate the bond’s price as a percentage of par. In this example, multiply 0.975 by 100 to get a price of 97.5 percent of par.

#### Tip

- Compare bond prices as a percentage of par between bonds with different par values. The bond with the lower price as a percentage of par sells for a greater discount relative to its par value. For example, a bond with a par value of $10,000 and a price of 95 percent of par sells for a greater discount than a bond with a par value of $1,000 and a price of 98 percent.

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