Bond YTM Calculator
Use a bond's price, coupons and maturity to solve for its yield to maturity.
Results
Review or adjust your inputs, then calculate to see your results and interpretation.
Understand this calculation
YTM is the discount rate that equates future bond payments with its price, assuming payments occur and it is held to maturity. Discount bonds usually have a higher YTM than coupon rate; premium bonds usually lower.
See calculation method and assumptions
Formula
Bond YTM
Bond price equals the present value of all coupons and principal discounted at the yield to maturity.
Variables, rates and periods
- Face / Price
- Face is principal repaid at maturity; Price is the bond's value today.
- Coupon
- Coupon per period = face value × annual coupon rate / payments per year.
- YTM / y
- Nominal annual yield to maturity, entered as a percentage; discounting uses its decimal value divided by payments per year.
- m / N
- m is coupon payments per year; N = years to maturity × m. Coupons are paid at period end.
Rate, periods, and valuation timing
- This page assumes purchase on a coupon date, with N = remaining years × coupon payments per year m as a whole number of periods.
- YTM is nominal annual yield, discounted at YTM ÷ m per period, rather than an effective annual rate.
- Realized compound return also depends on coupon reinvestment and timely payments.
Estimate annualized yield to maturity from price, coupons, and term.
Worked example
- Enter 1,000 face value, 950 market price, and a 5% coupon rate.
- Set five years to maturity with semiannual coupons.
- YTM is about 6.18%. Because price is below face value, this is a discount bond and YTM exceeds the coupon rate.
Frequently asked questions
How does YTM differ from current yield?
Current yield is annual coupon divided by price. YTM also includes principal at maturity and time value.
Is YTM a guaranteed return?
No. It assumes scheduled payments and holding to maturity, excluding default, taxes, fees, and reinvestment differences.
Why is discount-bond YTM higher?
Besides coupons, holding to maturity returns face value above the purchase price.