What is yield to maturity (YTM)?

YTM is the total annualized return an investor earns if the bond is purchased at the current price and held until it matures, assuming all coupon payments are reinvested at the same rate. It is the discount rate that equates the present value of all future cash flows to the bond's market price.

Why does YTM differ from the coupon rate?

The coupon rate is fixed at issuance and is based on face value. If the bond trades below face value (at a discount), YTM exceeds the coupon rate because you also gain the difference between the purchase price and face value at maturity. If the bond trades above face value (at a premium), YTM is lower than the coupon rate.

What is the difference between annual and semi-annual compounding?

Most US bonds pay coupons every six months (semi-annual). In semi-annual mode, the annual coupon is split into two equal payments per year and the YTM is solved on a per-period basis then annualized by multiplying by 2 (bond-equivalent yield convention). Annual mode pays one coupon per year.

How accurate is the YTM calculation?

This tool uses up to 200 bisection iterations and stops when the calculated bond price is within 0.0000001 currency units of the entered price. The displayed bond-equivalent annual YTM is rounded to four decimal places.

What does "present value" mean in the cash flow table?

Each cash flow is discounted back to today using the calculated YTM. The present value column shows what each future payment is worth in today's dollars. The sum of all present values equals the bond's current market price, confirming the YTM solution.

Can I use this for zero-coupon bonds?

Yes. Set the coupon rate to 0. The calculator will show a single cash flow at maturity (the face value) and compute the YTM based solely on the discount from the purchase price to the face value.

Yield to Maturity Detail Calculator

Enter bond face value, coupon rate, price, and term to calculate YTM and see a full cash flow table with present values for every coupon period.

Bond Parameters

Face Value ($)

Annual Coupon Rate (%)

Market Price ($)

Years to Maturity

Coupon Frequency

Semi-Annual Annual

YTM (Annual)

—

Total Coupons

—

Capital Gain/Loss

—

Total Return

—

PV of all cash flows = market price (confirms YTM solution)

Cash Flow Schedule

Period	Coupon	Principal	Total CF	Present Value	Cumulative PV

Enter bond parameters and click Calculate YTM

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Summary

The Yield to Maturity Detail Calculator computes the internal rate of return of a bond held to maturity, taking into account all coupon payments and the final face-value repayment. It uses iterative bisection to solve for the discount rate that makes the present value of all future cash flows equal to the current market price. The full cash flow schedule breaks down every coupon period so you can see exactly how each payment contributes to the overall return.

How it works

Enter the bond face value (par value), typically 1000.
Enter the annual coupon rate as a percentage (e.g. 5 for 5%).
Enter the current market price of the bond.
Set the years to maturity and select annual or semi-annual coupon frequency.
Click "Calculate" to solve for YTM via bisection iteration.
Review the cash flow table showing each period's coupon, principal repayment, total cash flow, present value, and cumulative PV.

Use cases

Comparing returns on bonds trading at a premium or discount to face value.
Evaluating whether a bond's market price fairly reflects current interest rates.
Building a bond ladder and verifying each rung's expected yield.
Teaching fixed-income concepts with a transparent period-by-period breakdown.
Stress-testing portfolios by adjusting maturity or coupon assumptions.
Checking broker-quoted YTM figures against an independent calculation.

Frequently Asked Questions

Last updated: 2026-05-23 · Reviewed by Nham Vu