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Bond Yield Calculator

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Your Results

If you pay $950.00 for this bond and hold it until it matures, your yield to maturity is 5.147% a year. Its current yield, which counts only the coupons, is 4.211%. The yield is above the 4% coupon rate because you pay less than the $1,000.00 face value and get the difference back at maturity. In total you receive $1,200.00, a gain of $250.00.

5.147%
Yield to maturity (YTM), per year
4.211%
Current Yield
5.213%
Effective Annual Yield
$1,200.00
Total Received
$250.00
Total Gain

Your cash flows over time

  • Price you pay
  • Coupons
  • Final payment

Three yields compared

Coupon rate4%
Current yield4.211%
Yield to maturity5.147%

Check this in the Bond Price calculator

Payment Schedule
PeriodPaymentPresent ValueRunning Total
1$20.00$20$19.50$19$19.50$19
2$20.00$20$19.01$19$38.51$39
3$20.00$20$18.53$19$57.04$57
4$20.00$20$18.07$18$75.11$75
5$20.00$20$17.61$18$92.72$93
6$20.00$20$17.17$17$109.89$110
7$20.00$20$16.74$17$126.63$127
8$20.00$20$16.32$16$142.95$143
9$20.00$20$15.91$16$158.87$159
10$1,020.00$1,020$791.13$791$950.00$950
Total$1,200.00$1,200$950.00$950–

Discounted at the 5.147% yield, the payments add up to the price you entered. That's what makes it the yield to maturity.

What Is Bond Yield?

A bond is a loan you make to a government or company. It pays interest, called the coupon, and repays the face value at maturity. A bond's yield is the return you earn for the price you pay. The lower the price, the higher the yield, so prices and yields move in opposite directions.

Types of bond yield

  • Coupon rate: the yearly interest as a percent of face value. It never changes, whatever you pay for the bond.
  • Current yield: the yearly coupons as a percent of the price. It ignores any gain or loss when the bond matures.
  • Yield to maturity (YTM): your yearly return if you hold the bond until it matures and reinvest each coupon at the same rate. It counts the coupons and the gain or loss, so it's the most complete measure.
  • Effective annual yield: the YTM with compounding included, which makes bonds with different payment schedules easier to compare.

How to Calculate Bond Yield

Current yield is a simple division:

Current yield= Annual couponBond price

Yield to maturity is the yearly rate that makes all the bond's discounted payments equal its price:

P= ∑t=1n C(1+r)t + F(1+r)n
  • P: the bond price.
  • C: the coupon per period (face value × coupon rate ÷ payments a year).
  • F: the face value.
  • n: the number of payments (years × payments a year).
  • r: the yield per period. YTM = r × payments a year.

This equation can't be rearranged to give r directly, so r is found by trial and error: try a rate, compare the result with the price, and adjust. The calculator does this for you.

Example

A $1,000 bond with a 4% coupon paid semi-annually, 5 years to maturity and a price of $950:

  • Coupon per period: $1,000 × 4% ÷ 2 = $20.00, for 10 payments.
  • Current yield: $40.00 ÷ $950 = 4.211%
  • Yield per period: the rate that makes the 10 payments worth exactly $950 is 2.573%.
  • Yield to maturity: 2.573% × 2 = 5.147%
  • Effective annual yield: (1 + 2.573%)2 − 1 = 5.213%

How to Use the Bond Yield Calculator

"A $1,000 bond pays a 4% coupon twice a year, matures in 5 years, and costs $950. What return would I really earn?" This calculator answers that.

Let's enter the numbers for this example in each box. They are already filled in when the calculator opens, so you can follow along and then change any box to match your own bond.

  • Face Value: Enter 1,000, which is the amount repaid when the bond matures. It must be greater than 0.
  • Coupon Rate: Enter 4, which is the yearly interest the bond pays, as a percent of its face value. Enter 0 for a zero-coupon bond.
  • Coupon Frequency: Choose Semi-Annually, which is how often the bond pays its coupon. You can also choose Annually, Quarterly or Monthly.
  • Years to Maturity: Enter 5, which is the time left until the bond matures. It must make a whole number of payments, so with semi-annual coupons 2.5 works but 2.3 doesn't.
  • Bond Price: Enter 950, which is what the bond costs to buy today. It must be greater than 0.

Calculate and Reset

Click Calculate to see your results. If a box has a problem, such as a term that doesn't make a whole number of payments, a message pops up under that box instead. With the default numbers you get:

  • Your Results: a short summary in words: the YTM (5.147%), the current yield (4.211%), and why the YTM differs from the coupon rate.
  • Yield to Maturity: the headline number.
  • Current Yield, Effective Annual Yield, Total Received and Total Gain: 4.211%, 5.213%, $1,200.00 and $250.00.
  • Your cash flows over time: the price you pay below the line, then the coupons and the final payment above it. Long bonds with many payments are grouped by year.
  • Three yields compared: bars for the coupon rate, current yield and YTM, with a link that opens the Bond Price calculator with these numbers filled in.
  • Payment Schedule: every payment discounted at the yield, with a running total that ends at the price, which shows the yield is right. Download Excel saves it with the formulas, so you can change a number at the top of the file and see the yield update.
  • Share Results: a link that opens this calculator with your numbers filled in. Copy it, or share it on Facebook or X.

Amounts of $1 million or more are shortened, for example $1.25M. Click Reset to put every box back to its default and show the default results again.

Video: How to Use the Bond Yield Calculator