Bond YTM Calculator

Solve for a bond's yield to maturity - the single annual rate that discounts every coupon and the face value back to the current market price.

Quick Facts

Method
Solves the yield that discounts all coupons plus face value back to today's price
Quick estimate: [C + (F - P)/n] / [(F + P)/2]. Assumes fixed coupons paid on schedule.

Your Results

Calculated
Yield to maturity (YTM)
-
Annual return if held to maturity
Current yield
-
Annual coupon / market price
Annual coupon income
-
Coupon rate x face value
Approximate YTM
-
Textbook shortcut estimate

Ready

Enter the bond details and press Calculate.

How to use the Bond YTM Calculator

Yield to maturity (YTM) is the single annualized rate of return you earn if you buy a bond at its current price and hold it until it matures, collecting every coupon and the face value at the end. Enter the bond's face value, current market price, annual coupon rate, years remaining, and how often it pays, then press Calculate.

How the calculation works

A bond's price equals the present value of all its future cash flows. YTM is the discount rate y that makes that present value match the price you pay:

Price = Σ Coupon / (1 + y/m)t (for t = 1 to N) + Face / (1 + y/m)N

Here m is the number of coupon payments per year, N = years × m is the total number of periods, and each period pays a coupon of (coupon rate × face) ÷ m. Because y sits in the denominator of every term and cannot be isolated algebraically, the calculator solves for it numerically using bisection - trying rates until the present value equals your price.

What the numbers mean

  • Yield to maturity: the annual return if you hold to maturity and reinvest coupons at the same rate. It is quoted as a nominal annual rate compounded m times per year.
  • Current yield: annual coupon divided by market price. It ignores the gain or loss as the price returns to par at maturity, so it differs from YTM.
  • Annual coupon income: coupon rate × face value - the fixed cash the bond pays each year, split across m payments.
  • Approximate YTM: the textbook shortcut [C + (F - P)/n] / [(F + P)/2], where C is the annual coupon, F the face value, P the price, and n the years. It lands close to the exact YTM and works as a quick sanity check.

Reading the result

Compare YTM to the coupon rate. A bond trading below par (a discount) has a YTM above its coupon rate; one trading above par (a premium) has a YTM below its coupon rate; a bond priced exactly at par has a YTM equal to its coupon rate. The calculator assumes fixed coupons paid on schedule with settlement on a coupon date, so it does not add accrued interest or account for call features, default risk, or taxes.

Frequently Asked Questions

What is yield to maturity (YTM)?
YTM is the single annual discount rate that makes the present value of a bond's coupons plus its face value equal to its current price. It represents the total return you would earn by buying at that price and holding to maturity, assuming coupons are reinvested at the same rate.
How is YTM different from the coupon rate and current yield?
The coupon rate is fixed against the face value. Current yield is the annual coupon divided by the market price. YTM also captures the gain or loss as the price moves toward par at maturity, so for a bond bought at a discount YTM is above the current yield and coupon rate, and for a premium bond it is below both.
Why can't YTM be solved with a simple formula?
The yield appears inside the denominator of every discounted cash flow and cannot be isolated algebraically, so it is found numerically. This calculator uses bisection, trying rates until the present value of all cash flows equals the price. The shortcut [C + (F - P)/n] / [(F + P)/2] only approximates the exact yield.
Does this calculator include accrued interest or taxes?
No. It assumes fixed coupons paid on schedule with settlement on a coupon date, and it reports a pre-tax yield. It does not add accrued interest between coupon dates or model call provisions, default risk, or taxes.

Related calculators