Bond Yield to Maturity Calculatorfor Comparing Bonds with DifferentPrices and Coupon Rates
Explains what bonds are and how they work, and calculates the annualized rate of return of a bond for you using the YTM formula.
This free online Bond Yield to Maturity Calculator will calculate a bond's total annualized rate of return if held until its maturity date, given the current price, the par value, and the coupon rate.
Using this calculator to calculate yield to maturity (YTM) will help you to quickly compare the total return on bonds with different prices and coupon rates.
What is Yield to Maturity?
In order to understand yield to maturity, it's important that you have a basic understanding of what bonds are, how they work, and how they are bought and sold.
What Are Bonds?
Basically, bonds are IOU's issued by a government entity or corporation, which promise to pay you interest on a sum of money borrowed from you -- along with the promise to repay the sum of money borrowed at the end of loan (referred to as the maturity date).
When a government entity or corporation issues bonds (looking to borrow money), the bonds have a stated par value, a stated maturity date, and a stated coupon rate.
What is Par Value?
The par value (also referred to as the "face value") is the amount the issuer (borrower) promises to pay at the end of the loan period. Typically bonds are issued with par values of $1,000 and can be purchased for close to their par value on the day they are issued.
What is Maturity Date?
The maturity date is the date the issuer promises to pay the holder of the bond an amount equal to the par value. Bonds can have maturity dates that range anywhere from 1 day up to 30 years, or more. Generally, the longer out the maturity date, the higher the interest rate the bond will pay. That's because longer maturities expose the bond holder to more risk than bonds with shorter maturities.
What is Coupon Rate?
The coupon rate is the annual interest rate the issuer will pay on the amount borrowed. For example, if a bond has a par value of $1,000 and a coupon rate of 8%, then you will receive annual coupon (interest) payments of $80 (1000 X .08 = $80) until the bond's maturity date. Most bonds make coupon payments semi-annually, so you would likely receive a $40 coupon payment two times each year.
What Makes Bond Yield Comparisons Difficult?
What makes comparing bond yields difficult, is that bonds are often bought and sold in between their maturity dates -- with the prices of the bonds constantly changing due to changing interest rates and the demand for borrowing money. In other words, you could buy a newly issued $1,000 bond today at close to face value, but a month from now the bond might be selling for more or less than what you paid for it.
Generally, if interest rates rise, the prices of bonds fall. And if interest rates fall, the prices of bonds rise. If you're not sure why prices and rates move in opposite directions, please visit the
page for a simple explanation. In any case, the important thing to realize is that bonds are rarely bought and sold at par value.
This means that if you are looking to invest in bonds, you will likely be purchasing bonds at prices that are higher or lower than their par value. And it's this price-to-par-value variance that makes it difficult to compare yields on bonds with different maturities, prices and coupon rates.
If you were to purchase a bond at a par value of $1,000 and held it until maturity, the yield would be roughly equal to the annual coupon rate. However, if you purchase a $1,000 bond for $900 (purchased at a discount) with a coupon rate of 6%, how would you know how the actual yield will compare to a $1,000 bond selling for $1,100 (purchased at a premium), but that has a coupon rate of 7%?
Enter the Yield to Maturity Calculation for Comparing Bonds
Yield to maturity is a rather complex return on investment calculation that accounts for both coupon payments and the gain or loss of principal that occurs when bonds are purchased for less than or greater than the par value. But in your case, all you need to do is to enter 4 variables for each bond and the yield to maturity calculator will do all of the complex calculations for you.
Please keep in mind that while the yield to maturity calculator can help you compare total returns on bonds, it cannot predict the future. Bonds, while considered to be safer than equities (stocks), do carry a risk that the issuer may default on the repayment. Of course, this risk is less when it comes to U.S. government bonds and Municipal bonds, and more when it comes to corporate bonds. And as with all types of investments, the greater the risk, the higher the expected return on investment.
With that, let's use the Bond Yield to Maturity Calculator to calculate the total annualized rate of return of a bond so you can quickly compare the actual yield to yields of bonds having different maturities, prices and coupon rates.
Bond Yield to Maturity Calculator
Instructions: Enter the current price of the bond, the par value, the coupon rate, and the number of years to maturity, then click the "Calculate Yield to Maturity" button.
Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Bond Yield to Maturity Calculator.
Current price ($):
Par value ($):
Coupon rate (%):
Years to maturity (#):
Current yield:
Yield to Maturity (YTM):
Annual coupon payment:
Total coupon payments:
Principal gain (-loss) at redemption:
Total return:
Please grade my work and help me improve:
If you liked this page, please share it, or give it a Like, +1, Tweet, or Pin.
Bond Yield to Maturity Calculator Glossary of Terms
Current price: The current (market) price of the bond. In other words, how much would you have to pay to purchase the bond today? Note that selling prices are typically listed in the "Bid Price" column of a bond table. This bid price is usually stated as a percentage of the bond's par value. For example, if a $1,000 par value bond has a bid price of "99.59", it means someone is willing to purchase it for $995.90 ($1,000 X .9959 = $995.90). When entering the current price into the yield to maturity calculator, please be sure to enter the full dollar amount and not the percentage.
Par value: The par value of the bond. The par value (face value) is the amount the issuer will return to the bond holder on the maturity date. Bonds are usually issued in par values of $1,000.
Coupon rate: The coupon rate of the bond. The coupon rate is the annual interest the bond pays. If a bond with a par value of $1,000 is paying you $80 per year, then the coupon rate would be 8% (80 & 1000 = .08, or 8%).
Years to maturity: The number of years remaining before the bond reaches its maturity date. The maturity
is the date the par or face value of the bond is returned to the bond holder.
Current yield: This is the effective annual rate of interest being paid by the issuer based on the purchase price of the bond and the amount of the annual coupon payments.
Yield to Maturity (YTM): This is the total YTM annualized rate of return on the bond if held until the maturity date. In addition to accounting for the interest rate being paid, this result also reflects the gain or loss resulting from the purchase price of the bond. Purchasing a bond at a discount (less than the par value) will serve to increase the annualized rate of return, whereas purchasing at a premium (more than the par value) will serve to lower the annualized rate of return. Note that the calculator assumes you will reinvest the coupon payments as they are received.
Annual coupon payment: Based on the entered par value and coupon rate, this is the amount of the annual coupon payment.
Total coupon payments: This is the total of all annual coupon payments between now and the maturity date.
Principal gain (-loss) at redemption: If the bond is selling at a discount (less than the face or par value), purchasing the bond will result in a capital gain at maturity. If the bond is selling at a premium (more than the face or par value), purchasing the bond will result in a loss of principal maturity.
Total return: Based on your entries, this is the total of all coupon payments plus the principal gain or loss at redemption. In other words, this is the net dollar amount earned on the investment.
- How much house can you buy?
Balance transfer
calculator
- how much will you need?
<img src="data:image/base64,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" alt="Help" onMouseover="ddrivetip('If you like my free-online- Site and you have any type of account on Google, you would be doing me a huge favor by giving the site a +1. If you like this particular Page on my site, please give the page a +1 as well.In return for your vote of confidence I promise to continue working hard to earn your return visits.', 250)" ; onMouseout="hideddrivetip()">
[] Subscribe To This Site
Top TenMoney Calculators
Follow me on any of the social media sites below and be among the first to get a sneak peek at the
that are being added or updated each month.
Monthly What's New Email Update!
Who knows if I will show up in your next search. This will insure you'll always know what I've been up to and where you can find me!
Don't worry -- your e-mail address is totally secure.
I promise to use it only to send you Whats New.
<input type='button' value='
Free Online Financial Calculators:
Other Free Online Calculators:债券里面的 yield-to-maturity（YTM）、coupon rate、bond yie_百度知道
债券里面的 yield-to-maturity（YTM）、coupon rate、bond yie
债券里面的 yield-to-maturity（YTM）、coupon rate、bond yield区别是什么啊 谢谢
提问者采纳
即持有到期才能得到的利率。bond yield 是指笼统的债券收益YTM是持有到期收益率。coupon rate 指息票利率，你根据这个利率拿利息，就是票面利率，它包括了资本利得
提问者评价
太给力了，你的回答完美的解决了我的问题！
其他类似问题
为您推荐：
yield的相关知识
等待您来回答
下载知道APP
随时随地咨询
出门在外也不愁请教几道金融学方面的题目（英语），谢谢1. A zero-coupon bond with face value $1,000 and maturity of five years sells for $746.22. What is its yield to maturity? What will happen to its yield to maturity if its price falls immediately to $730?2. A 20-year maturity bond with par value $1,000 makes semiannual coupon payments at a coupon rate of 8%. Find the bond equivalent and effective annual yield to maturity of the bond if the bond price is:a. $950b. $1,000c. $1,0503. Assume you have a one-year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero-coupon bond that pays $1,000 at maturity. The second has an 8% coupon rate and pays the $80 coupon once a year. The third has a 10% coupon rate and pays the $100 coupon once a year.a) If all three bonds are now priced to yield 8% to maturity, what are their prices?b) If you expect their yields to maturity to be 8% at the beginning of next year, what will their prices be then? What is your rate of return on each bond during the one-year holding period?4. It is now January 1, 2009, and you are considering the purchase of an outstanding bond that was issued on January 1, 2007. It has a 9% annual coupon and had a 20-year original maturity. (It matures on December 31, 2026.) There was 5 years of call protection (until December 31, 2011), after which time it can be called at 109 (that is, at 109% of par, or $1,090). Interest rates have declined since it was issued, and it is now selling at 114.12% of par, or $1,141.2.a. What is the yield to maturity?b. What is the yield to call? c. If you bought this bond, which return do you think you would actually earn? Explain your reasoning.d. Suppose the bond had been selling at a discount rather than a premium. Would the yield to maturity then have been the most likely actual return, or would the yield to call have been most likely?
xkk1994YJasR
为您推荐：
扫描下载二维码Corporate finance专业词汇手册_百度文库
两大类热门资源免费畅读
续费一年阅读会员，立省24元！
Corporate finance专业词汇手册
上传于||文档简介
&&C&#8203;o&#8203;r&#8203;p&#8203;o&#8203;r&#8203;a&#8203;t&#8203;e&#8203; &#8203;f&#8203;i&#8203;n&#8203;a&#8203;n&#8203;c&#8203;e&#8203;专&#8203;业&#8203;词&#8203;汇&#8203;手&#8203;册
阅读已结束，如果下载本文需要使用1下载券
想免费下载本文？
下载文档到电脑，查找使用更方便
还剩3页未读，继续阅读
你可能喜欢.Bond Valuation_百度文库
两大类热门资源免费畅读
续费一年阅读会员，立省24元！
.Bond Valuation
上传于||文档简介
&&.&#8203;B&#8203;o&#8203;n&#8203;d&#8203; &#8203;V&#8203;a&#8203;l&#8203;u&#8203;a&#8203;t&#8203;i&#8203;o&#8203;n
阅读已结束，如果下载本文需要使用1下载券
想免费下载本文？
下载文档到电脑，查找使用更方便
还剩7页未读，继续阅读
你可能喜欢}