Alpha and Beta Calculator
Free alpha and beta calculator. Measure your portfolio's market sensitivity (beta) and excess risk-adjusted return (alpha) against a benchmark index.
Bond Yield to Maturity Calculator
Calculate bond yield to maturity (YTM), current yield, duration, and total return. Includes cash flow schedule and premium/discount analysis.
Yield to Maturityโง
4.810%
Annualized return if bond is held to maturity
Current Yieldโง
4.592%
Annual coupon income รท current price
Macaulay Durationโง
8.14 yrs
Weighted avg time to receive cash flows
Modified Durationโง
7.95
Price sensitivity to 1% yield change
Total Coupon Incomeโง
$450.00
20 payments of $22.50
Capital Gain/Lossโง
$20.00
Face ($1,000.00) โ Price ($980.00)
Total Return ($)โง
$470.00
Coupon income plus capital gain/loss
After-Tax YTMโง
3.752%
YTM adjusted for 22% tax rate
Price vs Face Value
Discount: -2.00%Face: $1,000.00
| Period | Coupon Payment | Discounted Value |
|---|---|---|
| 1 | $22.50 | $21.98 |
| 2 | $22.50 | $21.47 |
| 3 | $22.50 | $20.97 |
| 4 | $22.50 | $20.48 |
| 5 | $22.50 | $20.01 |
| 6 | $22.50 | $19.54 |
| 7 | $22.50 | $19.09 |
| 8 | $22.50 | $18.65 |
| 9 | $22.50 | $18.21 |
| 10 | $22.50 | $17.79 |
| 11 | $22.50 | $17.38 |
| 12 | $22.50 | $16.97 |
| 13 | $22.50 | $16.58 |
| 14 | $22.50 | $16.19 |
| 15 | $22.50 | $15.82 |
| 16 | $22.50 | $15.45 |
| 17 | $22.50 | $15.09 |
| 18 | $22.50 | $14.74 |
| 19 | $22.50 | $14.40 |
| 20 | $22.50 | $14.07 |
Planning notes, formulas, and examples
About the Bond Yield to Maturity Calculator
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.
When This Page Helps
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.
How to Use the Inputs
- Enter the bond's face (par) value โ typically $1,000 for corporate bonds.
- Enter the annual coupon rate stated on the bond.
- Enter the current market price you would pay to buy the bond.
- Enter the remaining years until the bond matures.
- Select the coupon payment frequency (semi-annual is most common).
- Optionally enter your tax rate to see after-tax YTM.
- Review the yield metrics, duration, and cash flow schedule.
Formula used
YTM is solved from: Price = ฮฃ [C / (1+y)^t] + Face / (1+y)^n
Current Yield = Annual Coupon / Market Price
Macaulay Duration = ฮฃ [t ร PV(CFt)] / Price
Modified Duration = Macaulay Duration / (1 + y/freq)
Where C = coupon payment, y = periodic yield, n = total periods.Example Calculation
Result: YTM โ 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%.
Tips & Best Practices
- Compare YTM to the current yield to understand what portion of return comes from capital gain vs income.
- Use modified duration to estimate price impact when interest rates change.
- Tax-equivalent YTM for municipal bonds = YTM / (1 โ tax rate).
- Check for call provisions โ callable bonds may not reach maturity, making yield-to-call more relevant.
- Duration generally increases with maturity and decreases with coupon rate.
Yield Versus Current Income
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.
Duration Matters Too
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.
Match The Inputs To The Bond
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.
Sources & Methodology
Last updated:
Methodology
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.
Sources
- Bond (Investor.gov / U.S. Securities and Exchange Commission)
- Current Yield (Investor.gov / U.S. Securities and Exchange Commission)
- Investor Bulletin: Interest Rate Risk (Investor.gov / U.S. Securities and Exchange Commission)
Frequently Asked Questions
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.
More in this topic
Annualized Return Calculator
Free annualized return calculator. Convert cumulative investment returns into annualized rates to compare performance across different holding periods.
Annuity Calculator
Calculate the future value, present value, and payment schedule for ordinary annuities and annuities due. Includes growing annuity analysis and year-by-year breakdown.