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Yield to Maturity

Yield to maturity is used to determine the annual yield that a bond will pay the holder from the current date until the date of maturity. The yield will include both interest payments paid to the bond holder, as well as any capital gain that may occur. Use the yield to maturity calculator below to solve the problem.

Yield to Maturity Definition

Yield to Maturity is the annualized rate of return received by an investor purchasing a bond today and holding it until it matures, comprising of both capital gains and interest.


Interest Payment=The dollar amount of each interest payment
Future Value=The redemption value of the bond certificate
Present Value=The current market value of the bond
N=Number of interest payments until maturity


Yield To Maturity Formula



The Yield to Maturity is solved by iteration.  The yield is estimated, and then adjusted as needed to zero in on the exact yield to maturity. 

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