Yield to Maturity Calculator
Estimate the annualized return on a bond if it is held until maturity. This calculator uses an iterative bond-pricing approach rather than a rough shortcut.
The market price you would pay for the bond today.
Amount repaid by the issuer at maturity.
Annual coupon stated as a percentage of face value.
Remaining years until the bond matures.
Most U.S. bonds pay semiannually.
YTM is the discount rate that makes the present value of all future bond cash flows equal to the current market price.
What is yield to maturity?
Yield to maturity is the total annualized return an investor earns if the bond is bought at the current market price and held until maturity, assuming all coupon payments are made as scheduled and reinvested at the same yield.
Why can YTM differ from the coupon rate?
Coupon rate is based on face value, while YTM depends on the price you pay for the bond today. Discount bonds usually have YTM above the coupon rate, and premium bonds usually have YTM below the coupon rate.
Is YTM the same as current yield?
No. Current yield looks only at annual coupon income relative to current price. YTM also includes the gain or loss between current price and face value, plus the time value of money over the remaining life of the bond.
When is YTM most useful?
YTM is useful when comparing bonds with different prices, coupon rates, and maturities on a consistent annual return basis. It is one of the standard measures used in fixed-income analysis.
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📐 Formula
YTM is the discount rate that makes the present value of all future bond cash flows equal to the current market price.