Bond Yield to Maturity Calculator
Yield to maturity from a price, solved rather than approximated. It is the only yield measure that counts both the coupons and the pull to par, which is why it differs from current yield on any bond not trading at face.
Also called: yield to maturity calculator, bond yield calculator.
8.76% a year if held to maturity. The current yield is only 8.42%, because that measure ignores the ₹50 you also collect when the bond redeems at face.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.
How this is calculated
There is no algebraic solution for yield, so it is found by searching for the rate that reprices the bond to what you paid. Current yield divides the annual coupon by the price and stops there, which ignores the fact that a discount bond also gains as it approaches redemption at face. On a bond bought below par, yield to maturity is always the higher of the two.
solve for y: price = discounted coupons + discounted face value- P
- Price paid (currency)
- y
- Yield per period (decimal)
Method and limits
What it assumes
- Held to maturity, with every coupon paid and reinvested at the same yield.
What it deliberately does not model
- The reinvestment assumption rarely holds, so realised return usually differs.
- A callable bond may never reach maturity, in which case yield to call is the relevant figure.
Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator
Frequently asked questions
- Why is yield to maturity higher than the coupon on my bond?
- Because you bought it below face value. Alongside the coupons you collect the difference between what you paid and what you are repaid, and yield to maturity counts both.