Bond Yield Calculator
Current yield and yield-to-maturity (YTM) for a fixed-coupon bond, solved numerically via Newton-Raphson.
Result
- Current yield (annual coupon / price)Simpler measure — ignores capital gain/loss at maturity.5.263%
- Annual coupon ($)$50 (2× $25)
- Face value$1,000
- Current price$950
- StatusDISCOUNT bond — YTM > coupon rate. You paid below par so the capital gain at maturity boosts total yield above the stated coupon.
- Capital gain/loss at maturity$50 (gain)
- Periods to maturity20.00 (10 yr × 2/yr)
- Per-period yield used2.8308%
Step-by-step
- Current yield = annual coupon / price = $50 / $950 = 5.263%.
- YTM solves: P = C · ((1 − (1+y)^−n)/y) + F · (1+y)^−n, where C = $25 per period, n = 20.00 periods, F = $1,000.
- Numerical solution via Newton-Raphson seeded with the standard textbook approximation (C + (F−P)/n) / ((F+P)/2); converges in <20 iterations for any well-behaved bond.
- Bond-equivalent yield: y_periodic × 2 = 5.662%.
How to use this calculator
- Enter face value ($1,000 for most US corporates; $100 par convention is sometimes used for Treasuries).
- Enter the annual coupon rate as a percent (a "5% coupon" bond on $1,000 face pays $50/yr total).
- Enter the current market price you can buy at (clean price, not dirty).
- Enter years remaining to maturity.
- Set coupon frequency — semi-annual is the US default.
About this calculator
Two yield numbers fixed-income investors use, and they are NOT the same: **current yield** (annual coupon ÷ today's price — quick, ignores maturity) and **yield-to-maturity** (the true internal rate of return assuming you hold the bond to maturity and reinvest coupons at the same rate — the comparable rate against any other investment). When the price is below par (a "discount" bond), YTM is above the coupon rate; when it is above par (a "premium" bond), YTM is below the coupon. YTM is solved numerically because the pricing equation cannot be inverted analytically. This calculator uses Newton-Raphson, the standard textbook method. Semi-annual coupon frequency is the US bond-equivalent-yield (BEY) convention used by the Treasury Department and the major bond indices (Bloomberg US Aggregate, ICE BofA).