Modified duration

The modified duration is a measure of the sensitivity of a bond price to interest rates:

Modified duration = D ÷ (1+r)

where D is the duration and
r is the interest rate paid per period: coupon payment divided by price.

The percentage change in the price is equal to the change in interest rates multiplied by the modified duration. This is an approximation and becomes less accurate for larger interest rate changes. Interest rate changes are usually small and the approximation is more than good enough.