Enter the annual interest payment, face value, current price, and years to maturity of a bond. The calculator will evaluate and display the yield to maturity.

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## Yield to Maturity Formula

The following formula is used to calculate the yield to maturity of a bond or investment.

YTM = [ (AIP) + ( (FV â€“ CP) / (Y) ) ]/ [( FV + CP ) / 2 ]

- Where YTM is the yield to maturity
- AIP is the annual interest payment
- FV is the face value
- CP is the current price
- Y is the years to maturity

## Yield To Maturity Definition

Yield to maturity is the total monetary value a bond needs to reach in order for it to mature.

## Yield To Maturity Example

How to calculate a yield to maturity?

**First, determine the annual interest payment.**Calculate the total annual interest payment.

**Next, determine the face value.**Calculate the face value of the bond.

**Next, determine the current price.**Calculate the current price of the bond on the market.

**Next, determine the years to maturity.**Measure the number of years remaining until maturity.

**Finally, calculate the yield to maturity.**Calculate the yield to maturity using the formula above.

## FAQ

**What is yield to maturity?**

A yield to maturity is a total value a bond must achieve in order to reach maturity.