Bond Yield Calculator
Work out every bond yield from one screen. Enter the face value, the price you pay, the coupon, the frequency, and the years left to get the exact yield to maturity (YTM) plus the current yield, the total return broken into coupon income and capital gain, and the Macaulay and modified duration. Add a call date and call price to get the yield to call (YTC) and the yield to worst (YTW). Switch to price mode to reverse-solve the price from a target yield, and turn on the tax option for the after-tax and taxable-equivalent yields.
Formula
Worked example
A 1,000 face bond with a 5% coupon paid annually, bought for 950 with 5 years left, pays 50 a year. Solving for the rate that discounts the five 50 coupons plus the 1,000 par back to 950 gives a yield to maturity of about 6.19%, well above the 5.26% current yield, because the 50 discount is recovered at maturity. If the bond can be called at 1,020 in 2 years, the yield to call is about 8.4%, so the yield to worst stays at the 6.19% YTM.
What yield to maturity measures
Yield to maturity is the single annualized return you earn if you buy a bond at today price and hold it until it matures, collecting every coupon and the face value at the end. It blends two sources of return: the coupon income you receive each period, and any capital gain or loss between the price you pay and the par value repaid at maturity. Because it captures both, YTM is the standard headline figure professionals quote when comparing bonds that trade at different prices. This calculator reports it as the primary output and also breaks the total return into its coupon and capital-gain parts so you can see where the return comes from.
How this calculator finds the exact yield
The exact yield to maturity is the discount rate that makes the present value of all future coupons plus the face value equal to the bond current price. That equation has no closed-form solution, so the calculator solves it by bisection: it converts the annual coupon rate into a dollar coupon, splits it across the periods you choose, then searches for the per-period rate that prices the bond back to what you pay and annualizes it by the number of payments per year. The same discounted-cash-flow engine drives every other yield here. Switch the solve mode to price and the calculator runs the equation in reverse, returning the price that delivers a target yield to maturity, the way calculator.net and Omnicalculator price a bond from a quoted yield.
Yield to call, yield to worst, and duration
Many bonds are callable, meaning the issuer can redeem them early at a set call price. Turn on the callable option and enter the call price and the years to the call date to get the yield to call, the return you earn if the bond is redeemed at that earliest date. The calculator then reports the yield to worst, the lower of the yield to maturity and the yield to call, which is the conservative figure most professionals use because a bond is most likely to be called exactly when it would hurt your return. The calculator also returns Macaulay duration and modified duration, which measure how sensitive the price is to interest rates: a modified duration of 4 means a one percentage point rise in yields would cut the price by roughly four percent.
Current yield, after-tax yield, and tax-equivalent yield
Current yield divides the annual coupon by the price you pay, so it captures income but ignores the difference between price and face value. Yield to maturity folds that gain or loss back in along with the timing of every coupon. For a bond bought at a discount, YTM sits above the current yield; for a premium bond, YTM sits below it. Turn on the tax option to see the after-tax yield, which scales the YTM by one minus your marginal tax rate, and the taxable-equivalent yield, which shows the pretax yield a taxable bond would need to match a tax-free municipal bond at the same after-tax return. These figures are planning estimates and do not replace advice tuned to your tax situation.
Price, current yield, and YTM relationship
| Trading at | Price vs. par | Yield ordering |
|---|---|---|
| Discount | Below face value | YTM > current yield > coupon |
| Par | Equal to face value | YTM = current yield = coupon |
| Premium | Above face value | YTM < current yield < coupon |
How the price relative to par orders the coupon rate, current yield, and yield to maturity.
Frequently asked questions
What is the difference between yield to maturity and current yield?
Current yield is the annual coupon divided by the bond price, so it measures only income. Yield to maturity also accounts for the gain or loss between your purchase price and the face value repaid at maturity, plus the timing of every coupon, so it reflects your total return from holding the bond to the end.
What is yield to call and yield to worst?
Yield to call is the return you earn if a callable bond is redeemed early at its call price on the earliest call date, found by discounting the coupons and the call price back to today price. Yield to worst is simply the lower of the yield to maturity and the yield to call, the conservative figure most investors rely on because issuers tend to call bonds when it benefits them and reduces your return. Turn on the callable option to see both.
How do I find the price for a target yield?
Set the solve mode to price, then enter the yield to maturity you want to earn along with the coupon, frequency, and years. The calculator discounts every coupon and the par repayment at that target rate and returns the price you would pay to lock in that yield. This is the reverse of the default mode, which solves for the yield from a price.
What does modified duration tell me?
Modified duration estimates how much a bond price moves when market interest rates change. A modified duration of 5 means a one percentage point rise in yields would cut the price by about five percent, and a one point fall would lift it by about five percent. Longer maturities and lower coupons produce higher duration and so more price sensitivity to rates.
Why does coupon frequency matter for the yield?
Coupons paid more often are reinvested sooner, which changes the precise discount rate that prices the bond. Most U.S. bonds pay semi-annually, so that is the default here. Choosing annual, quarterly, or monthly adjusts both the number of periods and the per-period coupon, and the calculator re-solves every yield accordingly.