The yield to maturity and current yield of a bond bought at today's price.
Leave empty for $1,000.
2 = semiannual (US Treasuries and most corporate bonds), 1 = annual. Leave empty for 2.
Example Result
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The calculated result will appear here after you press Calculate.
Estimates for planning only; not financial, tax or investment advice. See our Disclaimer.
A bond's coupon rate is fixed when it is issued; its yield is not. Buy the bond below its face value and you collect the coupons plus a gain when it is repaid at par; buy above par and the premium is lost by maturity. Yield to maturity (YTM) is the single annual rate that makes the price you pay equal to the present value of every coupon and the final repayment. Enter the par value, the market price, the annual coupon rate, the years left to maturity and how often the coupon is paid; the calculator solves for YTM exactly, shows the current yield (annual coupon ÷ price) and the quick textbook approximation for comparison. The guide below works a discount and a premium bond, shows when the shortcut formula misleads, and explains what YTM quietly assumes.
Enter the par value (usually $1,000) and the price you would pay today.
Enter the annual coupon rate, the years left to maturity and the number of coupons a year (2 for most US bonds).
Press Calculate for the exact yield to maturity, the current yield and the shortcut estimate.
By O.E. — Partner, chairman of the board and CEO of a metal products manufacturer for 21 years; the company exports to 45 countries.
Drafted with AI assistance; calculations checked against primary sources and tested with the site's own code. About FlowUtil
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Current yield = annual coupon ÷ price: the income on your money this year. Yield to maturity is the rate y that makes the price equal to the present value of every coupon and the repayment, Price = Σ (C ÷ f) ÷ (1 + y/f)ᵗ + Par ÷ (1 + y/f)ⁿ, with f coupons a year — the annual return if you hold to maturity. The approximate YTM, [C + (Par − Price) ÷ years] ÷ [(Par + Price) ÷ 2], is a quick estimate without a solver. US Treasury notes pay interest every six months, so their YTM is quoted as twice the six-month rate (the bond-equivalent yield).
1$1,000 par, price $950, 5% coupon, 10 years.
Coupon $50; current yield 50 ÷ 950
Current yield 5.26% · YTM 5.662% (semiannual) or 5.669% (annual) · shortcut 5.641%
The yield is above the coupon because the $50 discount is earned on top of the coupons. Pricing the bond at 5.669% with annual coupons gives back $949.98 in the Bond Price Calculator.
2$1,000 par, price $1,050, 4% coupon, 5 years.
Coupon $40; current yield 40 ÷ 1,050
Current yield 3.81% · YTM 2.918% (semiannual)
The $50 premium disappears by maturity, pulling the yield below both the coupon and the current yield.
| Bond | Approximate | Exact (annual coupons) | Error |
|---|---|---|---|
| $950, 5%, 10 years | 5.641% | 5.669% | −2.8 bp |
| $1,050, 4%, 5 years | 2.927% | 2.911% | +1.6 bp |
| $1,200, 8%, 15 years | 6.061% | 5.948% | +11.3 bp |
| $700, 3%, 20 years | 5.294% | 5.513% | −21.9 bp |
For the last bond a yield of 5.294% would price it at $721, not $700 — which is why the calculator solves for YTM exactly and shows the shortcut only for reference.
YTM is the return you earn only if you hold the bond to maturity, every payment arrives in full and on time, and every coupon is reinvested at the YTM itself. For the $950 bond, reinvesting the coupons at 3% instead of 5.67% gives a realised return of 5.17% a year; at 8% it gives 6.14%. For a callable bond the issuer may repay early when rates fall; yield to call, the same calculation with the call date and call price, is then the more realistic figure.
A 10-year, 5% semiannual bond priced at a 5% yield is worth $1,000.00. If yields rise to 6% it falls to $925.61; if they fall to 4% it rises to $1,081.76. The longer the maturity and the lower the coupon, the larger the swing.