Bond Yield Calculator
Calculate the yield to maturity (YTM) and current yield of a bond. Enter the face value, coupon rate, current market price, and years to maturity to determine the bond's annualized return.
Bond Yield Calculator
FAQ
What is yield to maturity (YTM)?
YTM is the total annualized return an investor would earn if they hold a bond until maturity and all coupon payments are reinvested at the same rate. It accounts for coupon income, capital gains or losses, and the time value of money.
How is YTM different from current yield?
Current yield only considers annual coupon income relative to the bond's market price. YTM also factors in capital gains or losses from the difference between purchase price and face value at maturity.
Why does this calculator use Newton's method?
YTM cannot be solved algebraically for bonds with multiple coupon payments, so numerical methods like Newton's method are used to iteratively approximate the yield that equates the bond's price to its present value of cash flows.