Bond Yield to Maturity
Compute YTM, current yield, coupon yield, and duration from bond inputs.
How It Works
Enter your bond's parameters — current market price, face value (par), annual coupon rate, years remaining to maturity, and coupon payment frequency. The calculator uses the Newton-Raphson method to iteratively solve for the Yield to Maturity (YTM) — the internal rate of return that equates the present value of all future coupon payments plus the face value at maturity to the current bond price.
Beyond YTM, the tool computes current yield (annual coupon divided by market price), coupon yield (coupon rate relative to face value), Macaulay duration (weighted average time to receive cash flows), and modified duration (price sensitivity to yield changes). All calculations run locally in your browser — no data leaves your device.
FAQ
What is Yield to Maturity (YTM)?
Yield to Maturity (YTM) is the total return anticipated on a bond if held until it matures. It factors in the current market price, face value, coupon payments, and time to maturity. YTM is expressed as an annual percentage rate and assumes all coupon payments are reinvested at the same rate.
What's the difference between current yield and YTM?
Current yield only considers the annual coupon payment relative to the bond's current market price. YTM provides a more complete picture because it also accounts for the gain or loss you'll realize if the bond is held to maturity, including the difference between the price you paid and the face value you'll receive.
What is Macaulay duration and modified duration?
Macaulay duration measures the weighted average time (in years) until you receive all the bond's cash flows. Modified duration estimates how much the bond's price will change given a 1% change in yield. A higher duration means greater price sensitivity to interest rate changes.
When does a bond trade at a premium vs discount?
A bond trades at a premium when its market price is above face value (par), typically because its coupon rate is higher than current market rates. It trades at a discount when the price is below face value. At par means price equals face value.
Does coupon payment frequency matter?
Yes. Semi-annual coupon payments are the standard for most U.S. corporate and government bonds. However, some bonds pay annually (common in Europe) or quarterly. The payment frequency affects the periodic YTM calculation and the annualized YTM.
Related Tools
More calculators available: stock chart, portfolio rebalancer, compound interest comparator, and many more.