Yield to Maturity Calculator (YTM)
Enter a bond's face value, coupon rate, current market price and years to maturity to calculate the exact yield to maturity (YTM) — the total annualised return if you hold to maturity.
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currency units
years
Coupon frequency
Annual return if held to maturity and all coupons are reinvested at YTM
How does this calculator work?
YTM is the discount rate r that solves P = Σ C/(1+r/f)^t + F/(1+r/f)^n. Calculated by Newton-Raphson iteration from a close initial approximation. A bond below par has YTM > coupon rate; above par, YTM < coupon rate. Assumes coupons reinvested at YTM and no default.
Formula
How this is calculated
Yield to maturity is the internal rate of return (IRR) of a bond: the single discount rate r that makes the present value of all future cash flows — periodic coupon payments plus the face value returned at maturity — equal to the current market price. The relationship is non-linear, so the calculator solves it with Newton-Raphson iteration starting from the approximate formula YTM ≈ (C + (F − P)/n) / ((F + P)/2), where C is the annual coupon, n is years to maturity, F is face value, and P is current price.
A bond trading below par (discount bond) has a YTM above its coupon rate because the investor also receives a capital gain at maturity. A bond trading above par (premium bond) has a YTM below its coupon rate because of the capital loss. Current yield — the coupon divided by the current price — ignores the capital gain or loss and is always different from YTM unless the bond trades exactly at par.
Assumptions: all coupon payments are reinvested at the YTM rate (rarely achievable in practice), the issuer does not default, and the bond is held to the stated maturity date. YTM does not account for taxes on coupon income or capital gains.
Frequently asked questions
Current yield is simply the annual coupon divided by the current price — it ignores any capital gain or loss between the purchase price and par at maturity. YTM is the full internal rate of return including coupons and the price-to-par gain or loss, making it a more complete measure of total return.
Bond prices and yields move inversely. If the market price falls below par, you buy at a discount and receive more than you paid at maturity, boosting the total return above the coupon rate — so a lower price equals a higher YTM.
Semiannual compounding is standard for US Treasury and corporate bonds. The YTM is quoted as an annual rate, but compounding twice a year at r/2 gives a slightly different result than compounding once at r — especially for longer maturities and higher yields.
Also known as
TG we-Calculate Editorial Team. (2026). Yield to Maturity Calculator (YTM) [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/yield-to-maturity-calculator
TG we-Calculate Editorial Team. "Yield to Maturity Calculator (YTM)." TG we-Calculate. 2026. https://we-calculate.com/calculator/yield-to-maturity-calculator.
TG we-Calculate Editorial Team, "Yield to Maturity Calculator (YTM)," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/yield-to-maturity-calculator
@misc{wecalculate_yield_to_maturity_calculator, title = {Yield to Maturity Calculator (YTM)}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/yield-to-maturity-calculator}}, year = {2026}, note = {TG we-Calculate} }
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