Finance & Money
Bond Yield Calculator
Calculate annual coupon cash, current yield, price gain or loss at maturity, and an approximate yield to maturity from face value, purchase price, coupon rate, and remaining years. The approximation is designed for screening rather than trade settlement or valuation.
Annual coupon payment-
Current yield-
Approximate yield to maturity-
Price gain or loss at maturity-
Exact scenario comparison
Purchase price scenarios
Exact scenario comparisonPurchase price changes while all other entered assumptions remain constant.
| Purchase price | Annual coupon payment | Current yield | Approximate yield to maturity | Price gain or loss at maturity |
|---|
How to use Bond Yield Calculator
- Enter face value, clean purchase price, annual coupon rate, and years remaining to maturity on a consistent per-bond basis.
- Compare coupon cash, current yield, price gain or loss, and approximate yield to maturity rather than relying on coupon rate alone.
- Use dated cash flows, coupon frequency, accrued interest, call terms, credit risk, taxes, and market convention for an investment-grade valuation.
Calculator guide
Understanding Bond Yield Calculator
A bond's coupon rate, current yield, and yield to maturity answer different questions. The coupon rate sets cash paid from face value, current yield compares that coupon with purchase price, and yield to maturity also incorporates the price moving toward face value at maturity.
Calculation method
How the calculation works
Calculate coupon cash flow, current yield, and an approximate yield to maturity that annualizes the discount or premium over the remaining term. Calculate coupon cash flow, current yield, and an approximate yield to maturity that annualizes the discount or premium over the remaining term.
Worked situations
Practical examples
- A $1,000 face-value bond with a 5% coupon pays $50 annually even if purchased for $950.
- Buying below face value creates a modeled price gain at maturity in addition to coupon income, assuming the issuer pays par.
- A premium bond purchased above face value can have a current yield above or below approximate YTM because part of the premium is lost by maturity.
Better inputs
Useful tips
- Use the bond's clean or full price consistently and account separately for accrued interest when evaluating a transaction.
- Verify coupon frequency, day-count convention, call schedule, maturity date, credit quality, currency, and tax treatment.
- Use a dated cash-flow yield solver for precise YTM, yield-to-call, or settlement calculations.
Before relying on the result
Limitations and common mistakes
- The YTM result uses a common approximation that annualizes the discount or premium and divides by average face and purchase price.
- Coupon frequency, exact payment dates, accrued interest, reinvestment, calls, defaults, taxes, transaction costs, inflation, and market price changes are excluded.
- Yield to maturity assumes contractual payments are made; it does not measure credit risk or guarantee realized return.
Reference
Key terms
- Face value
- Principal amount scheduled to be repaid at maturity, assuming no default.
- Coupon payment
- Face value multiplied by the stated annual coupon rate.
- Current yield
- Annual coupon cash divided by current purchase price.
- Yield to maturity
- Annualized return concept including coupon cash and movement between purchase price and maturity value.
Important note
Calculated from the entered values and stated financial terms. It is not a product quote, lending decision, tax filing, or investment recommendation.
Frequently asked questions
Why is coupon rate different from current yield?
Coupon rate divides coupon cash by face value, while current yield divides the same cash by purchase price.
Why is approximate YTM different from current yield?
Approximate YTM also includes the annualized gain or loss between purchase price and face value.
Does holding to maturity guarantee the displayed yield?
No. Default, calls, reinvestment rates, taxes, fees, currency changes, and inaccurate cash-flow timing can change realized return.
Can this price a bond from a required yield?
No. It starts with an entered price; a bond-pricing calculator discounts each contractual cash flow at the required yield.