Bond Yield to Maturity (YTM) Calculator
Calculate the yield to maturity (YTM) of a bond from its price, face value, coupon rate, and time to maturity.
Understand the true annualized return of a bond investment.
Yield to Maturity (YTM)
Yield to Maturity Approximation
YTM ≈ [C + (F − P) / n] ÷ [(F + P) / 2]
Where:
- C = annual coupon payment
- F = face (par) value
- P = current market price
- n = years to maturity
YTM is the total annualized return if you hold the bond to maturity and reinvest all coupon payments at the same rate.
Key concepts:
- If Price < Face Value → bond trades at a discount (YTM > coupon rate)
- If Price > Face Value → bond trades at a premium (YTM < coupon rate)
- If Price = Face Value → bond trades at par (YTM = coupon rate)