Yield to Maturity Calculator
The annual return a bond pays if you buy it at today’s price and hold it to maturity, with the effective annual yield and the current yield beside it.
Result
Yield to maturity: 5.6617%
Assumes the bond is held to maturity, every payment is made and coupons are reinvested at the same yield.
- Effective annual yield
- 5.7418%
- Current yield
- 5.2632%
- Coupons a year
- $50.00
- Accrued interest
- $0.00
- Full price, with accrued interest
- $950.00
https://calcgallery.com/investment-returns/yield-to-maturity-calculator/
Results are arithmetic on the returns, rates and horizons you enter, not a forecast and not investment, tax or retirement advice. The site supplies no expected return, inflation rate, contribution limit, tax rate or withdrawal rate. Real returns vary from year to year, and fees, taxes and the order of returns all change the outcome. Check anything that matters with a qualified adviser. Read the full disclaimer
How to use the Yield to Maturity Calculator
- Enter the bond's quoted price, which leaves out accrued interest.
- Enter its face value, coupon rate, how often it pays and the years left to maturity.
- Read the yield to maturity, and the effective annual yield and current yield beside it.
The equation being solved
price = Σ coupon ÷ (1 + y/m)^t + face value ÷ (1 + y/m)^n − accrued interestThe page finds the y that makes the right-hand side equal the price you entered, where m is the number of coupons a year and t counts the periods to each payment.
Price and yield move in opposite directions
Pay less for the same coupons and face value and you earn more on your money, so a lower price means a higher yield. The change is larger for long bonds, because a price difference is spread over fewer years on a short one.
What the diagram shows
What the bond costs today beside the total of every coupon and the face value it will pay, before discounting. The yield to maturity is the rate that makes the second worth the first.
With your numbers
- At 5.6617%, 20 coupons of $25.00 and the $1,000.00 face value are worth $950.00 today
- Effective annual yield = (1 + 5.6617% ÷ 2)^2 − 1 = 5.7418%
Quick reference
Assumes the bond is held to maturity, every payment is made and coupons are reinvested at the same yield.
| Example | Yield to maturity |
|---|---|
| 5% twice a year, 10 years, at 950 | 5.6617% |
| Same at 1,000: par | 5% |
| Same at 1,080: a premium | 4.0205% |
| Zero coupon, 10 years, at 600 | 5.1741% |
| 4.5% at 1,030 | 4.1307% |
| 4.75 years left at 950 | 6.2299% |
Common questions about the Yield to Maturity Calculator
- How is yield to maturity found?
- There is no formula that gives it directly. It is the one yield at which the bond price equation returns the price you paid, so the page tries yields, narrowing the range by halves until the price matches to a fraction of a cent. The bond price calculator runs the same equation the other way, so the two pages agree.
- Why is the yield to maturity different from the current yield?
- The current yield counts only the coupons: 45 a year on a bond bought at 1,030 is 4.37%. The yield to maturity also counts the 30 you lose as the price falls back to 1,000 at maturity, so it is lower. For a bond bought below face value it is the other way round.
- What does the yield assume?
- That you hold the bond to maturity, every coupon and the face value are paid on time, and each coupon is reinvested at the same yield. If rates change, reinvested coupons earn a different rate and your actual return differs. A callable bond may also be repaid early, which this page does not model.
- What is the effective annual yield?
- Yields on bonds that pay twice a year are quoted as twice the half-year rate. Compounding the half-year rate over a full year gives slightly more: a quoted 5.66% is 5.74% a year once the second coupon earns interest on the first.