Bond Yield-to-Maturity Calculator
Estimate the yield on a fixed-rate bond held to maturity. Compare coupon income with the return implied by your purchase price and remaining payments.
Remaining bond payments
- Total coupons plus principal received
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- Total receipts minus settlement cost (not annualized)
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| Payment date | Coupon | Principal | Total payment |
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Current yield versus yield to maturity
Current yield is annual coupon dollars divided by the clean purchase price. It describes coupon income relative to price, but ignores the gain or loss when the bond repays face value and the timing of payments.
Yield to maturity (YTM) is the annualized discount rate that makes the present value of all remaining coupons and principal equal the total settlement cost. Buying below face value adds a redemption gain; buying above face value creates a redemption loss. A high coupon does not necessarily mean a high YTM.
The main result is a nominal annual yield: periodic yield × coupon frequency. Effective annual yield is (1 + periodic yield)^frequency − 1. Realizing a compounded return assumes coupons can be reinvested at the implied yield. Neither measure includes fees, taxes, default, early sale or a call before maturity.
Dates, accrued interest and calculation convention
This calculator models regular fixed-rate coupons paid backward from the maturity date. If maturity is at month end, all coupon dates use month end; otherwise they use the same day, clipped for shorter months. Settlement on a coupon date excludes that day's coupon and has zero accrued interest. No holiday, business-day or ex-coupon adjustments are applied. Odd first or last coupons are not supported.
We use actual days within the surrounding coupon period. Let w = days from settlement to next coupon / days in that coupon period. Accrued interest = coupon × (1 − w), and dirty price = clean price + accrued interest. The solver finds periodic rate r such that dirty price = sum of payment k / (1 + r)^(w + k − 1). This fractional-period compound convention applies even when only one payment remains; it can differ from broker quotes or spreadsheet functions that use 30/360 day counts or a simple-interest final period.
Total coupon income is the sum of future coupon checks, before subtracting accrued interest purchased from the seller. The net receipts figure subtracts the entire settlement cost. Zero-coupon bonds are supported by entering a zero coupon rate; their periodic annualization follows the selected frequency. Negative yields are possible. The model assumes repayment at face value and is not a yield-to-call or yield-to-worst calculator.