Calculate bond yield to maturity (YTM), current yield, duration, and total return. Includes cash flow schedule and premium/discount analysis.
Yield to Maturity (YTM) is the total return anticipated on a bond if it is held until it matures. It accounts for all coupon payments, the capital gain or loss from purchasing at a price different from face value, and the time value of money. YTM is the single most important metric for comparing bonds.
Unlike current yield, which only considers the annual coupon relative to price, YTM captures the complete picture of a bond investment's return. A bond trading at a discount has a YTM higher than its coupon rate because you also earn the capital gain at maturity. A bond trading at a premium has a YTM below its coupon rate.
This calculator performs the iterative computation needed to find YTM, and also calculates Macaulay and modified duration for interest rate risk assessment. The cash flow table shows each coupon payment discounted back to present value, helping you understand the bond's value composition.
YTM calculation requires solving for the discount rate that matches the bond price to all future cash flows. This calculator handles that iterative step and adds duration metrics so you can compare bonds on both expected return and interest-rate sensitivity.
YTM is solved from: Price = Σ [C / (1+y)^t] + Face / (1+y)^n Current Yield = Annual Coupon / Market Price Macaulay Duration = Σ [t × PV(CFt)] / Price Modified Duration = Macaulay Duration / (1 + y/freq) Where C = coupon payment, y = periodic yield, n = total periods.
Result: YTM ≈ 4.74%
A $1,000 face value bond with 4.5% coupon purchased at $980 with 10 years to maturity (semi-annual payments) has a YTM of approximately 4.74%. The discount contributes about 0.24% above the current yield of 4.59%.
Current yield only tells you the coupon income relative to the purchase price. YTM is more complete because it also captures the gain or loss between the purchase price and face value at maturity.
Two bonds can have similar YTM and very different interest-rate risk. Macaulay and modified duration help you see how much price sensitivity you are taking on to earn that yield.
Use the correct coupon frequency, clean purchase price, and remaining maturity. A small mismatch in those inputs can move the calculated yield more than most investors expect.
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This calculator solves the bond pricing equation for the yield that discounts all future coupon and principal cash flows to the current market price. It then derives current yield and duration measures from the same schedule.
The page is a bond-pricing worksheet. It assumes the stated coupon frequency, face value, price basis, and maturity are correct, and it does not model default or call risk beyond the user-selected inputs.
Current yield only considers coupon income relative to price. YTM also accounts for capital gains/losses and the time value of reinvested coupons.
The YTM equation is a polynomial that cannot be solved algebraically for bonds with multiple coupon payments. Numerical methods like bisection find the rate that equates present value of cash flows to price.
Duration measures how sensitive a bond's price is to interest rate changes. A duration of 7 years means the bond loses approximately 7% in value for every 1% increase in yield.
Modified duration adjusts Macaulay duration for the compounding period and gives a more practical estimate of price sensitivity to yield changes.
No. YTM assumes all coupons are reinvested at the YTM rate and the bond is held to maturity. Default risk, call provisions, and reinvestment risk can cause actual returns to differ.
With no intermediate coupon payments, all cash flow is concentrated at maturity, making the bond more sensitive to interest-rate changes than a coupon bond with the same maturity.