Yield to Maturity (YTM) Calculator
This calculator helps you calculate the Yield to Maturity (YTM) of a bond or fixed-income investment. YTM represents the total return an investor can expect to earn if the bond is held until maturity, accounting for the current bond price, face value, coupon interest, and the time remaining until maturity.
Calculate Yield to Maturity (YTM) of Your Bond
Yield to Maturity (YTM) Formula
Where:
- C – Annual coupon payment (in dollars)
- F – Face value of the bond (or par value)
- P – Current bond price
- n – Number of years until maturity
This formula estimates the annualized rate of return assuming the bond is held until maturity.
The Yield to Maturity (YTM) is one of the most important measures for bond investors. It gives an idea of the return an investor can expect to earn if the bond is held until its maturity date. It factors in the bond’s current market price, face value, interest payments (coupons), and the time remaining until maturity. YTM is a comprehensive metric used to assess the attractiveness of a bond relative to other investment options. It assumes that all coupon payments are reinvested at the same rate, which may not always be realistic but provides a standardized benchmark.