Bond Yield Calculator

YTM is the total annualized return you earn if you buy a bond at its current price and hold it to maturity, assuming all coupon payments are reinvested at that same rate. It is the single discount rate that makes the present value of every coupon plus the face value redemption equal to what you paid. The calculator compounds the per-period rate up to an annual figure, so a 4% semiannual YTM shows as roughly 8.16% annually, not 8%.

Current yield divides the annual coupon by the price you paid and stops there. It ignores any capital gain or loss between today's price and the face value you receive at maturity. YTM folds that gain or loss in, which is why a discount bond's YTM exceeds its current yield and a premium bond's YTM falls below it.

If you pay $900 for a bond that redeems at $1,000, you collect the regular coupon every period plus a $100 capital gain at maturity. YTM blends both pieces into one annualized return, pulling it above the stated coupon rate. The reverse applies to a premium bond: paying $1,050 for a $1,000 par bond means a $50 loss at maturity, so YTM lands below the coupon rate.

Most US corporate and Treasury bonds pay semiannually, so that is the standard choice. Use annual for many European bonds, quarterly for some floating-rate notes, and monthly for certain mortgage-backed or retail-targeted bonds. The frequency affects both the coupon payment size and how the periodic yield is compounded up to the annual YTM.

Macaulay duration is the present-value-weighted average time until you receive all of a bond's cash flows, expressed in years. Modified duration divides that figure by (1 + the per-period yield) and estimates the percentage price change for a one-percentage-point shift in yield. A modified duration of 7 means the bond's price falls about 7% if yields rise by 1 percentage point. That is an approximation that works best for small yield moves.