A 1,000 bond bought at 940
Face $1,000.00, price $940.00, coupon 4%, 10 years, 2 coupons a year.
Yield to maturity 4.76%. Current yield 4.26%. Coupons $400.00.
Bond yield to maturity calculator
The yield is the return that makes the price you pay match the coupons and the face value.
You are assumed to hold the bond to the end. It is not called early, and tax is not taken out.
%
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Yield to maturity
4.76%
Current yield 4.26%.
- Coupon income
- $400.00
- Cash if held
- $460.00
Next: Dividend reinvestmentA yield that is paid as a dividend instead.
How this is calculated
Price as the present value of coupons and face value
price = Σ coupon ÷ (1 + y)^t + face ÷ (1 + y)^n
| y | The yield per coupon period. The quoted yield multiplies that by the number of coupons a year. |
|---|---|
| current yield | One year of coupons divided by the price you pay. It ignores the gain or loss to face value. |
A bond bought below face value yields more than its coupon. A bond bought above face value yields less. A price equal to face value yields the coupon rate.
The solver is a numerical search. A nonsense price, such as zero, does not get a yield.
Worked examples
Loading an example fills the tool and scrolls you back to the result. Money examples stay in US dollars on the page. The symbol you picked changes; the numbers do not convert.
The same bond bought at face value
Face $1,000.00, price $1,000.00, coupon 4%, 10 years, 2 coupons a year.
Yield to maturity 4.00%. Current yield 4.00%. Coupons $400.00.
Embed this calculator
Paste this on a page you control. The frame shows the tool only. The formula stays on this page, and the frame links back here.
<iframe src="/embed/bond-yield-to-maturity-calculator" title="Bond yield to maturity" width="100%" height="720" style="border:0;max-width:42rem" loading="lazy"></iframe>Questions
How is this different from the coupon rate?
The coupon rate is what the bond pays on its face value. Yield to maturity is what you earn given the price you actually pay.
What does current yield leave out?
The difference between the price and the face value. A discount bond’s current yield is not the full return if you hold it.
Can I use this for a bond that might be called?
No. The page assumes you receive every coupon and the face value at the end.