Yield to Maturity Calculator
Calculate precise Yield to Maturity (YTM) using Newton-Raphson bisection. Compares YTM vs current yield vs coupon rate, computes Yield to Call (YTC), Yield to Worst (YTW), real YTM, after-tax YTM, and bond-equivalent yield.
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Yield to Maturity (YTM)
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Current Yield —
Coupon Rate —
Bond Type —
Extended More scenarios, charts & detailed breakdown ▾
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Yield to Maturity (YTM)
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Current Yield —
Coupon Rate —
Yield Relationship —
Professional Full parameters & maximum detail ▾
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YTM Variants
Nominal YTM —
Real YTM (Inflation-Adjusted) —
After-Tax YTM —
Market Convention
Bond-Equivalent Yield (BEY) —
Bond Classification —
How to Use This Calculator
- Enter the bond's Face Value, Annual Coupon Rate, Current Market Price, Years to Maturity, and Payment Frequency.
- YTM is solved iteratively (bisection method — 200 iterations for precision to 0.0001%).
- Compare YTM vs Current Yield vs Coupon Rate in the dedicated tab.
- Use the Yield to Call tab to input call price and date, and see YTW.
- Open Professional for real YTM, after-tax YTM, and bond-equivalent yield.
Formula
YTM: solve for r where Price = Σ CF_t / (1+r/freq)^t (iterative bisection method)
Real YTM = (1 + Nominal YTM) / (1 + Inflation) − 1
Example
Example: $1,000 face, 5% coupon, price = $950, 10 years, semi-annual. Iterative solver finds periodic rate = 0.02747. YTM = 0.02747 × 2 = 5.494%. Current Yield = 50/950 = 5.26%. YTM > Current Yield > Coupon: confirms discount bond.
Frequently Asked Questions
- YTM is the total annualized return if you buy a bond today and hold it until maturity, assuming all coupon payments are reinvested at the same rate. It is the discount rate that makes the present value of all future cash flows equal to the bond's current price. Unlike current yield, YTM accounts for capital gain/loss at maturity.
- Current yield = Annual coupon / Market price. It ignores the maturity value. YTM accounts for the entire holding period including the redemption at face value. For a discount bond (price < face), YTM > Current Yield > Coupon Rate. For a premium bond, the order reverses.
- YTC is the yield assuming the bond is called (redeemed early) at the call date and call price. Callable bonds are often called when interest rates fall (so issuers can refinance cheaper), which is bad for investors. YTW (Yield to Worst) = min(YTM, YTC) — the worst outcome an investor might face.
- BEY converts an annual yield to a semi-annual convention by doubling the semi-annual periodic yield. It allows comparison between annual-pay bonds (like Eurobonds) and semi-annual bonds (like US Treasuries). BEY = 2 × semi-annual periodic YTM.
- Real YTM adjusts the nominal YTM for inflation using the Fisher equation: Real YTM ≈ (1 + Nominal YTM) / (1 + Inflation) − 1. If your bond yields 5.5% and inflation is 2.5%, the real yield is about 2.9%. Real yield measures true purchasing power return.
Related Calculators
Sources & References (5) ▾
- Handbook of Fixed Income Securities — Frank Fabozzi — McGraw-Hill
- CFA Institute — Fixed Income Vol 5: Yield Measures — CFA Institute
- SEC — Bond Investor Bulletin: Yield — U.S. Securities and Exchange Commission
- YTM Explained — Investopedia — Investopedia
- FINRA — Understanding Bond Yield — FINRA