Bond YTM Calculator
Calculate yield to maturity (YTM) for bond investments and analysis
Calculate Bond YTM
Principal amount paid at maturity
Current market price of the bond
Annual interest rate as percentage of face value
Number of coupon payments per year
Time until bond matures
Bond YTM Results
Annual Coupon: $90.00 | Coupon per Period: $90.00
Premium/Discount: $$-150.00 (-10.00%)
Annual Capital Gain/Loss: $+$10.00 (+0.74%)
Total Periods: 15 payments
YTM Analysis
Example Calculation
Company Alpha Bond
Face Value: $1,500
Bond Price: $1,350
Annual Coupon Rate: 6%
Frequency: Annual (1)
Years to Maturity: 15 years
YTM Calculation
• Annual Coupon: $1,500 × 6% = $90
• Current Yield: $90 ÷ $1,350 = 6.67%
• YTM: 7.11% (iterative calculation)
• Capital Gain: $150 ÷ 15 years = $10/year
YTM Components
Interest Income
Regular coupon payments received
Periodic income component
Capital Gain/Loss
Difference between price and face value
Realized at maturity
Reinvestment
Compounded return assumption
Coupons reinvested at YTM
YTM Tips
YTM is the internal rate of return (IRR)
Assumes coupons reinvested at YTM rate
Higher YTM for discount bonds
Compare YTM across different bonds
Understanding Bond Yield to Maturity (YTM)
What is YTM?
Yield to Maturity (YTM) is the total annual return an investor can expect if they hold a bond until it matures and reinvest all coupon payments at the YTM rate. It's essentially the internal rate of return (IRR) of the bond investment.
Why YTM Matters
- •Enables comparison between different bonds
- •Accounts for both income and capital gains/losses
- •Standard measure in bond analysis
- •Reflects time value of money
YTM Formula
Bond Price = Σ [C/(1+YTM)^t] + F/(1+YTM)^n
- C: Coupon payment per period
- F: Face value at maturity
- YTM: Yield to maturity (what we solve for)
- t: Time period (1, 2, 3, ... n)
- n: Total number of periods
Note: YTM calculation requires iterative methods due to its complexity.