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Financial Planning

Bond Yield Calculator

Calculate a bond’s yield to maturity (YTM), current yield and effective annual yield from its price, coupon and maturity.

Your inputs

Results

Yield to maturity (annual, nominal)

5.6617%

Current yield
5.2632%
Approximate YTM (shortcut formula)
5.641%
Effective annual yield
5.7418%

≈Estimate based on the stated model and assumptions

Notes for this result

  • Assumes the bond is bought on a coupon date, held to maturity, and all coupons are reinvested at the YTM.

Inputs are never added to links for financial, salary or health calculators.

What this calculator does

YTM is the single discount rate that equates a bond’s price with the present value of its coupons and face value. It is the standard way to compare bonds with different coupons and prices.

Formula and method

Solve Price = Σ_{k=1}^{n} C ÷ (1 + y/f)^k + F ÷ (1 + y/f)^n for y (numerically). Current yield = annual coupon ÷ price. Approximate YTM = (C + (F − P)/years) ÷ ((F + P)/2).

Worked example

Calculated by this tool with its default inputs:

Inputs

  • Current bond price: 950 (any currency)
  • Face (par) value: 1000 (any currency)
  • Annual coupon rate: 5 %
  • Years to maturity: 10
  • Coupon frequency: Semi-annual

Results

  • Yield to maturity (annual, nominal): 5.6617%
  • Current yield: 5.2632%
  • Approximate YTM (shortcut formula): 5.641%
  • Effective annual yield: 5.7418%

How to read the results

A bond priced below par has YTM above its coupon rate; above par, below it.

Assumptions and limitations

  • Assumes purchase on a coupon date, holding to maturity, no default and reinvestment at the YTM.
  • Callable bonds should also be assessed by yield to call.

Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.

Questions

Why is the shortcut YTM different?

It is a linear approximation; the solved YTM is exact under the stated assumptions.

Methodology and verification

Result type
Estimate based on the stated model and assumptions
Formula version
1.0
Automated verification
3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
Editorial review
Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.

Privacy

Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy