How is this different from an instalment loan?

Nothing is repaid until maturity, so the balance never falls and interest compounds on the whole amount for the whole term. An instalment loan of the same size and rate costs far less, because every payment removes principal that would otherwise have carried interest for the rest of the term.

What is the bond mode for?

Discounting: turning a known amount due later into what it is worth now. A zero-coupon bond paying $50,000 in ten years at 6% is worth $27,919 today, and that is the price at which buying it earns exactly 6%. Pay more and you earn less than 6%.

Does this price a coupon bond?

No. This handles a single payment at maturity — a zero-coupon bond, a discount note, or a balloon. A bond paying regular coupons is the sum of many discounted payments plus the discounted face value, and each coupon needs its own term.

Why does compounding frequency matter more here?

Because there is nothing else happening. On an instalment loan the payments dominate; here the only mechanic is interest earning interest, so the frequency compounds over the entire term. Over ten years at 6%, annual compounding gives 1.791 times the principal and continuous gives 1.822.

Deferred Payment and Bond Calculator

With amount borrowed 25000 usd, annual interest rate 6 %, years to maturity 10 years, deferred payment and bond comes to $44,771.19 — answer. It is reached in 8 steps, the last of which is 1 * 44771.192 + 0 * 27919.739, and each one is printed on the page with its numbers filled in. The formula is the one published by US SEC Investor.gov, not an approximation fitted to it.

What a loan repaid in one lump sum at maturity grows to, or what a known amount due at maturity is worth today.

Formula and sources checked 19 August 2026 · How we check

What you know The amount borrowed — find what is owed at maturity, Amount borrowed 25000, Annual interest rate 6, Years to maturity 10 years

$44,771.19

Answer for the example below. Editing a field recomputes the calculator below; this figure holds the answer the page was loaded with.

It is written into the HTML rather than drawn by a script, so a search engine reading this page without running JavaScript still finds an answer.

What you knowAmount borrowedusdAnnual interest rate%Years to maturityyearsInterest compoundsUS corporate and treasury bonds conventionally quote semi-annual compounding.

Answer

$44,771.19

What one dollar grows to over the term: 0 * exp(6 / 100 * 10) + (1 - 0) * pow(1 + 6 / 100 / 1, 1 * 10)1.791
Effective annual yield: (pow(1.7908477, 1 / 10) - 1) * 1006 %
Owed at maturity: 25000 * 1.7908477$44,771
Worth today: 50000 / 1.7908477$27,920
Answer: 1 * 44771.192 + 0 * 27919.73944,771.192
Interest over the term: 1 * (44771.192 - 25000) + 0 * (50000 - 27919.739)$19,771
Multiple of the starting amount: 1.791
Years to double at this rate: log(2) / log(pow(1.7908477, 1 / 10))11.896 years

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Worked example

$25,000 borrowed at 6% with nothing repaid until year ten comes to $44,771 — the interest alone is $19,771, four fifths of what was borrowed. Nothing amortises, so every year of interest earns interest of its own.

How to work it out yourself

1.Choose which end you know. Lending money and asking what comes back is the deferred case; being promised an amount and asking what to pay for it is the bond case.
2.Set the compounding frequency to match the instrument. US bonds conventionally use semi-annual compounding, and using annual instead understates the yield.
3.Read the multiple. It is the same number for any principal, which makes it the quickest way to compare two terms without arithmetic.

The formula

What one dollar grows to over the term0 * exp(6 / 100 * 10) + (1 - 0) * pow(1 + 6 / 100 / 1, 1 * 10)
Effective annual yield(pow(1.7908477, 1 / 10) - 1) * 100
Owed at maturity25000 * 1.7908477
Worth today50000 / 1.7908477
Answer1 * 44771.192 + 0 * 27919.739
Interest over the term1 * (44771.192 - 25000) + 0 * (50000 - 27919.739)
Multiple of the starting amount
Years to double at this ratelog(2) / log(pow(1.7908477, 1 / 10))

Source: US SEC Investor.gov — bonds and how they are priced, US Treasury — securities pricing and accrued interest

Questions people actually ask

How is this different from an instalment loan?: Nothing is repaid until maturity, so the balance never falls and interest compounds on the whole amount for the whole term. An instalment loan of the same size and rate costs far less, because every payment removes principal that would otherwise have carried interest for the rest of the term.
What is the bond mode for?: Discounting: turning a known amount due later into what it is worth now. A zero-coupon bond paying $50,000 in ten years at 6% is worth $27,919 today, and that is the price at which buying it earns exactly 6%. Pay more and you earn less than 6%.
Does this price a coupon bond?: No. This handles a single payment at maturity — a zero-coupon bond, a discount note, or a balloon. A bond paying regular coupons is the sum of many discounted payments plus the discounted face value, and each coupon needs its own term.
Why does compounding frequency matter more here?: Because there is nothing else happening. On an instalment loan the payments dominate; here the only mechanic is interest earning interest, so the frequency compounds over the entire term. Over ten years at 6%, annual compounding gives 1.791 times the principal and continuous gives 1.822.

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