# How to Calculate Approximate Modified Duration

Updated: Jul 26, 2021

The general formula for approximate modified duration:

Example: An annual coupon bond maturing in ten years pays a $100 dividend and trades at par. Calculate the approximate modified duration of the bond assuming a 1% yield change.

**Estimating Price Changes Using Approximate Modified Duration**

Given that the modified duration is 6.5134 approximate the change in price that results from a 2% increase in the yield.

Approx Change: -6.5135 *.02 = -12.3069%

1000 * (1-.123069) = $876.93