Macaulay duration is calculated by adding the results of multiplying the present value of each cash flow by the time it is received and dividing by the total price of the security. Example 1: Betty holds a five-year bond with a par value of $1,000 and coupon rate of 5%. For simplicity, let"s assume that the coupon is paid annually and that interest rates are 5%. What is the Macaulay duration of the bond?