Solve a fixed-coupon bond’s nominal yield to maturity from its coupon-date price and compare it with current yield.
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0.000001 – 1,000,000,000,000 currency units
0 – 1000 %
0.000001 – 100 years
0.000001 – 1,000,000,000,000 currency units
Nominal annual yield to maturity
5.66%
Assumes promised fixed coupons and principal are paid as scheduled, with valuation on a coupon date. Yield to maturity is not a guaranteed realized return.
Numerically solve the coupon-date bond pricing equation for yield.
Current yield excludes capital gain or loss at maturity and differs from yield to maturity.
Numerically solve price = discounted coupons + discounted redemption value. Current yield is annual coupon cash divided by price.
A bond priced at face value with a 5% coupon has 5% yield to maturity. Discounted prices generally imply higher yields for the same promised cash flows.
No. The calculation assumes promised payments occur. Default, early redemption, reinvestment opportunities, taxes and fees affect realized returns.
Last updated . Results are estimates for informational purposes only.