Effective Interest Method Calculator
Bond amortization schedule using the effective interest method. Starting with example numbers — edit any field.
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Market rate is above the stated rate, so the bonds issue at a discount: issue price $91,889.10 vs. face $100,000.00 (discount of $8,110.90).
| Period | Cash Interest Paid | Interest Expense | Discount Amortization | Ending Carrying Value |
|---|---|---|---|---|
| 0 (issue) | $91,889.10 | |||
| 1 | $3,000.00 | $3,675.56 | $675.56 | $92,564.66 |
| 2 | $3,000.00 | $3,702.59 | $702.59 | $93,267.25 |
| 3 | $3,000.00 | $3,730.69 | $730.69 | $93,997.94 |
| 4 | $3,000.00 | $3,759.92 | $759.92 | $94,757.86 |
| 5 | $3,000.00 | $3,790.31 | $790.31 | $95,548.17 |
| 6 | $3,000.00 | $3,821.93 | $821.93 | $96,370.10 |
| 7 | $3,000.00 | $3,854.80 | $854.80 | $97,224.90 |
| 8 | $3,000.00 | $3,889.00 | $889.00 | $98,113.90 |
| 9 | $3,000.00 | $3,924.56 | $924.56 | $99,038.46 |
| 10 | $3,000.00 | $3,961.54 | $961.54 | $100,000.00 |
| Total | $30,000.00 | $38,110.90 | $8,110.90 |
Interest expense = beginning carrying value × market rate per period (4.00%). Cash interest = face value × stated rate per period. The final period is adjusted by a few cents at most so the carrying value lands exactly on face value.