Bond Yield Calculator: Yield to Maturity (YTM)
Work out a bond's yield to maturity (YTM) from its price, or its price from the yield, with the current yield, coupon and duration.
What it does
The yield to maturity is the yearly return you get if you buy a bond at today's price, receive every coupon and hold it until it pays back its face value. It is the rate that makes the present value of all those payments equal to the price, found here by bisection. The current yield only divides the yearly coupon by the price and ignores the gain or loss at maturity.
How to use it
- Type the face value, the coupon rate, the years to maturity and how often coupons are paid.
- Choose whether you know the price or the yield and type it.
- See the yield to maturity or the price, the current yield and the duration.
The arithmetic runs in your browser. Nothing you type is sent anywhere and nothing is stored, so you can use these with real numbers.
Frequently asked questions
How do I calculate yield to maturity?
Find the rate that makes the coupons and the face value, discounted, equal the price. A 1,000 bond with a 5% coupon paid twice a year, 10 years to maturity, bought at 950: YTM 5.66%.
What is the difference between current yield and YTM?
The current yield is 50 ÷ 950 = 5.26% and only counts the coupons. The YTM of 5.66% also counts the 50 gain when the bond pays back 1,000.
Why do bond prices fall when rates rise?
The coupons are fixed, so a new buyer only pays a price that gives the higher market yield. The same bond is worth 925.61 when the yield is 6%.
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