Bond Yield Calculator
Current yield and approximate YTM from price and coupon.
What it does
Bond yield translates coupon and price into return rates. Current yield divides yearly coupon by what you pay today, while yield to maturity folds in the discount or premium amortized to the end date.
The tool above takes face value, coupon rate, market price, and years left. It returns both yields with the yearly coupon dollars beside them.
The default $1000 par 4% bond at $800 with 10 years pays $40 a year: 5% current with about 6.67% approximate YTM. At a $1100 premium the same bond reads 4.55% current and 3.81% YTM.
Definitions follow FINRA yield guidance with SEC investor references behind the approximation. Both stress price and yield move opposite: rising prices compress every yield.
How to use
- Enter the face (par) value.
- Enter the coupon rate from issuance.
- Enter the market price you would pay.
- Enter the years left to maturity.
- Read YTM first for hold to end comparison.
Formula
- coupon
- Yearly dollars from the fixed rate.
- discount
- Face minus price, positive below par.
- average
- Midpoint of face and price weighting.
Approximation for quick comparison; settlement math discounts each cash flow exactly. Zero coupon bonds read YTM from discount alone.
Worked example
Example: $1000 par, 4%, $800, 10 years
Defaults: face 1000, coupon 4%, price 800, 10 years.
- Coupon: 1000 x 0.04 = $40 a year.
- Current: 40 / 800 = 5%.
- Discount per year: (1000 - 800) / 10 = $20.
- YTM: (40 + 20) / ((1000+800)/2) = 60 / 900 = 6.67%.
- Tool shows 5%, 6.67%, $40.00 /yr.
Reference table
| Price | Current | Approx YTM |
|---|---|---|
| $800 discount | 5% | 6.67% |
| $1000 par | 4% | 4% |
| $1100 premium | 3.64% | 2.86% |
Limits
- Approximation, not settlement yield math.
- Ignores reinvestment, taxes, and fees.
- Callable bonds may end before maturity.
- Default risk sits outside the numbers.
Common mistakes
- Reading coupon as yield on discounted bonds.
- Ignoring years left in current yield.
- Comparing premium bonds by coupon alone.
- Forgetting call dates cut yields short.
- Mixing nominal with after tax returns.
Try it yourself
Quick checks. Answers sit tucked under each question.
$1000 5% at $1100, 10 years?
Current 4.55%, YTM (50-10)/1050 = 3.81%.
At par?
Both yields equal the coupon: 5% and 5%.
Zero coupon $600 to $1000 in 10y?
YTM ≈ (0+40)/800 = 5%.
Questions
Coupon vs yield?
Coupon is fixed dollars; yield divides by your price. Discounts lift it above coupon.
What is YTM?
Total annualized return holding to maturity, folding discount or premium inside.
Why approximate?
Exact YTM solves discounted cash flows iteratively; this fraction lands close for comparison.
Premium bonds yield less?
Yes. Paying $1100 for $50 coupons reads 4.55% current, 3.81% YTM.
Do prices and yields oppose?
Always. Higher prices compress every yield measure.
What about calls?
Yield to call uses call price and date instead; use the earlier of the two.