🏦 Bond YTM

Yield to maturity from price, coupon and term.

What it does

Solves for the yield to maturity (YTM) of a bond from its price, coupon, and remaining term — the return you earn if held to maturity.

When to use it

Use it to compare bonds trading at different prices, or to see what return a bond actually offers before you buy it.

Assumptions
  • Coupons are reinvested at the YTM itself.
  • The bond is held to maturity with no default.
  • Coupon payments are semi-annual by default.
Inputs
%
Pro tip

A discount bond's YTM exceeds its coupon; a premium bond's is lower. Compare bonds on YTM, not coupon, because price differences compensate for the coupon. Remember YTM assumes reinvestment at the same rate — real returns will differ.