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Calculators/Retirement & Investing

Bond Yield Calculator

Calculate yield to maturity (YTM) and current yield for any bond.

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%
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yrs

How to Use This Calculator

1. Enter the bond's face (par) value — typically $1,000 for US corporate/Treasury bonds.

2. Enter the annual coupon rate (the stated interest rate on the bond).

3. Enter the current market price of the bond.

4. Enter years to maturity and coupon payment frequency.

Key relationship: When bond prices rise, yields fall — and vice versa. This is fundamental to fixed income investing.

Real-World Examples

$1,000 bond, 5% coupon, trading at $950, 10 years:
YTM ≈ 5.56% (bought at discount = yield above coupon)
$1,000 bond, 5% coupon, trading at $1,050, 10 years:
YTM ≈ 4.45% (bought at premium = yield below coupon)

Frequently Asked Questions

What is Yield to Maturity (YTM)?

YTM is the total return you'd earn if you bought the bond today and held it to maturity, accounting for coupon payments and the difference between purchase price and face value. It's the most comprehensive measure of a bond's return.

What's the difference between current yield and YTM?

Current yield = annual coupon ÷ price (ignores capital gain/loss at maturity). YTM includes both coupon income and the price-to-par adjustment over time.

How do rising interest rates affect bonds?

When market rates rise, existing bond prices fall (so their yields match the new market rate). Longer maturity bonds are more sensitive to rate changes than short-term bonds.

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