Yield to Maturity Calculator

What is Yield to Maturity (YTM)? Yield to Maturity (YTM) is the single discount rate that makes the bond price equal to the present value of its future cash flows (coupons + pri...

Yield to Maturity (YTM) Calculator

Estimate a bond’s yield to maturity (YTM) from its market price, face value, coupon rate, time to maturity, and payment frequency. Includes scenarios and a concise “What It Means” section.

$

Current market price of the bond per unit of face value (par). If you’re looking at a quote as a percent of par (e.g., 98.0), convert it to dollars (e.g., $980 for $1,000 par).

$

Amount repaid at maturity (often $1,000 per bond). Coupons are typically calculated as a percentage of face value.

%

Nominal annual coupon rate as a percent of face value. For a 5% coupon on $1,000 par, the bond pays $50 per year in coupons (split across the payment frequency).

How often coupons are paid. YTM is quoted as an annual rate consistent with this compounding frequency.

Time remaining until the bond repays face value. The calculator converts this into an approximate number of coupon periods using your payment frequency.

Scenarios
Try a few common bond setups to see how price, coupon rate, and maturity affect YTM.
Discount bondNear parPremium bondZero-coupon

Results

  • Yield to maturity (YTM)— %
  • Coupon payment (per period)$
  • Price vs par— %
  • Pricing profile—

Enter your inputs above to calculate the results.

What is Yield to Maturity (YTM)?

Yield to Maturity (YTM) is the single discount rate that makes the bond price equal to the present value of its future cash flows (coupons + principal).

In corporate finance, YTM is a market-based proxy for a bond’s IRR and a practical starting point for estimating cost of debt, plugging into WACC, benchmarking funding costs, and testing value creation under different capital structure choices.

Formula

P = sumt = 1ncdot mC / ((1 + y / m)t) + FV / ((1 + y / m)ncdot m)
C = ccdot FV / m

(If you’re trying to sanity-check the time value math, this is just present value using periodic compounding—see also EAR when comparing yields across different compounding frequencies.)

Example

Assume a bond with: Price = $980, Face value (par) = $1,000, Annual coupon rate = 5%, Payments per year = 2 (semiannual), Years to maturity = 5.

Coupon per period:

C = (0.05 × 1000) / 2 = 25

so the bond pays $25 every 6 months for

ncdot m = 5 × 2 = 10

periods, then returns $1,000 at maturity.

Solving the pricing equation gives a Yield to Maturity of about math]yapprox 5.46%[/math, with price vs par of

980 / 1000 = 98%

, so it trades at a discount (below par).

(For interest-rate sensitivity, pair YTM with Macaulay duration, modified duration, and convexity.)

How to Use the Yield to Maturity Calculator

Frequently Asked Questions

Why is my YTM higher than the coupon rate?

Because you’re buying the bond at a discount to par, so you earn the coupons plus a price gain as it pulls back to $1,000 at maturity.

Is YTM the same thing as current yield?

No. Current yield is basically coupon ÷ price (income-only). YTM includes income + the gain/loss from buying above/below par, spread over the remaining life.

My bond pays semiannually—does the calculator handle that correctly?

Yes. Selecting “Semiannual (2x)” splits the annual coupon into two equal payments and solves YTM with twice as many periods (years × 2).

Can I rely on YTM if I won’t hold the bond to maturity or it’s callable?

Not fully. YTM assumes you hold to maturity and receive all payments as scheduled; if you expect to sell early or the bond can be called, use a holding-period return or yield-to-call instead.

Sources & Methodology