Yield to Maturity (YTM) Calculator
Estimate a bond's yield to maturity — the total annual return you'd earn holding it to maturity, accounting for its coupon and any gain or loss versus its price.
Your details
- Current yield
- 5.26%
- Annual coupon
- $50.00
Formula
YTM ≈ [C + (F − P) ÷ n] ÷ [(F + P) ÷ 2], where C is the annual coupon, F the face value, P the price, and n the years to maturity. Current yield = annual coupon ÷ price.
How it works
When a bond trades below face value, its YTM is higher than its coupon rate because you also capture the gain to par at maturity; above face value, YTM is lower. This uses the standard approximation, which is close for most bonds.
Frequently asked questions
What is yield to maturity?⌄
YTM is the total annual return you'd earn if you buy a bond at its current price and hold it until it matures, including both coupon payments and any gain or loss to face value.
How is YTM different from current yield?⌄
Current yield is just the annual coupon divided by price. YTM also factors in the gain or loss from buying above or below face value, so it's a more complete measure.
Is this the exact YTM?⌄
It's a widely used approximation that's very close for typical bonds. The exact YTM requires solving for the rate that discounts all cash flows to the price.
Sources & methodology
Standard YTM approximation. Assumes annual coupons and hold-to-maturity; the exact YTM solves the price equation. Not investment advice.
- •Investor.gov — bonds — SEC
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