The duration of this bond, if today is October 2, 2009, is 998 years (October 1, 3007 minus October 2, 2009)
Bond length is a tool to gauge how much bond prices will probably fluctuate if and when interest rates change. Bond duration is a measure of interest rate risk, to put it more precisely. Investors can decide how bonds fit in to a larger investment portfolio by understanding bond length.
The duration formula is used to determine how sensitive a bond is to changes in interest rates. It is computed by dividing the total of the discounted future cash inflow of the bond and the corresponding number of years by the sum of the discounted future cash inflow.
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