Calculate Yield to Maturity (YTM) using a bond's current price, face value, coupon rate, years to maturity and coupon frequency.
Enter the bond information below. The calculator estimates the annualized YTM that makes the present value of the bond's future cash flows equal to its current market price.
Yield to Maturity (YTM) is an estimate of the annualized rate of return an investor would earn if a bond were purchased at its current market price and held until maturity, assuming the bond makes its scheduled payments.
Unlike the coupon rate, YTM takes the bond's current market price into account. This makes YTM useful when comparing bonds trading at different prices.
The YTM is the periodic discount rate that makes the present value of the bond's future coupon payments and principal equal to its current price.
Because YTM cannot always be solved directly with a simple algebraic formula, this calculator uses an iterative numerical approach to find the yield that matches the bond's current price.
The coupon rate tells you the interest payment promised by the bond relative to its face value. YTM considers the bond's current market price, coupon payments and repayment of principal.
YTM stands for Yield to Maturity. It represents the annualized return implied by a bond's current price, coupon payments and maturity value.
No. The coupon rate determines the bond's scheduled coupon payment, while YTM incorporates the bond's market price and maturity value as well.
An investor purchasing a bond below face value can potentially receive both coupon income and a gain toward face value at maturity. This generally makes YTM higher than the coupon rate.
An investor paying more than face value may receive coupon income but also face a reduction toward the bond's lower redemption value at maturity. This generally reduces the YTM relative to the coupon rate.
No. YTM is based on assumptions about holding the bond to maturity and receiving scheduled payments. Actual investment returns can be affected by taxes, fees, defaults, reinvestment rates, early redemption and other factors.
This calculator is provided for educational and informational purposes only. It does not constitute financial, investment, tax or legal advice.
Actual bond returns may differ from the calculated YTM because of transaction costs, taxes, changes in interest rates, credit events, reinvestment rates, early redemption and other market conditions.