Bond Yield Calculator

Type a face value, coupon rate, and market price into the fields above and the calculator instantly hands back a current yield, a yield to maturity, a duration figure, and a full coupon-by-coupon cash flow schedule. Before trusting any of those numbers for a real purchase decision, it helps to see exactly where they come from - so this page walks through the same math using the calculator's own default inputs, then draws a clear line between a bond's "yield" and the yield language used for stocks.

A Worked Example, Using the Numbers Already in the Form

Leave the calculator at its defaults - a $1,000 face value bond, a 5% annual coupon paid semi-annually, 10 years to maturity, trading at $950 - and here is what happens behind the scenes:

• Current yield is the easy one: annual coupon divided by price. $50 ÷ $950 = 5.26%. It ignores the fact that you paid $950 for something that repays $1,000 at maturity - a $50 gain baked into the price that current yield never sees.
• Yield to maturity has no algebraic formula; the calculator solves for it iteratively (Newton-Raphson), searching for the single discount rate that makes 20 semi-annual coupons of $25 plus a $1,000 repayment worth exactly $950 today. That rate lands around 5.66% - higher than the current yield because it also captures the $50 capital gain, spread across 10 years.
• Modified duration comes out near 7.7 for this bond. That means if market yields jumped a full percentage point tomorrow, this bond's price would be expected to drop roughly 7.7%, all else equal - the mechanical consequence of a fixed-rate asset suddenly competing against newly issued, higher-paying bonds.

Change one input - drop the price to $900, say - and rerun it. The YTM climbs further above the coupon rate, because you're now paying even less for the same fixed payments. That inverse price-yield relationship is the single most important thing to internalize about bond math.

Current Yield, YTM, or Dividend Yield - Which Number Are You Actually Reading?

"Yield" gets used loosely across asset classes, and conflating the bond version with the stock version leads to bad comparisons. If you've also used our Dividend Yield Calculator, here is the distinction that actually matters:

• A bond's current yield and YTM are built on contractual cash flows - the issuer is legally obligated to pay the coupon and return face value, barring default. YTM also has a defined endpoint: maturity.
• A stock's dividend yield is built on a discretionary payment - a board can cut or suspend it at any time, and common stock never "matures" or repays a face value. Dividend yield alone also says nothing about whether the payout is sustainable; that job belongs to something like our P/E Ratio Calculator, which weighs price against earnings rather than price against income already received.
• In practice: reach for this bond calculator when comparing fixed-income instruments with defined maturities and coupons. Reach for the dividend yield tool when comparing income-paying equities, where "yield" is a snapshot of current income, not a promise about total return.

Frequently Asked Questions

Why does YTM rise when price falls, even though the coupon never changes?
The coupon is fixed in dollars. YTM restates that fixed dollar amount as a percentage of what you actually paid, plus the built-in gain from buying below par and being repaid at $1,000. Pay less for the same payments and the percentage return goes up.

What happens if I set the coupon rate to 0% for a zero-coupon bond?
Every coupon payment in the calculation becomes $0, so the Newton-Raphson solver is left finding the single rate that grows your purchase price into the face value by maturity - it still converges normally. Zero-coupon bonds carry no reinvestment risk, since there's nothing to reinvest, but they carry the longest duration of any bond at a given maturity, making them the most rate-sensitive.

Does this tool handle callable bonds?
No - it computes standard yield-to-maturity, assuming the bond survives to its stated maturity date. A callable bond lets the issuer redeem it early, typically when rates have dropped and refinancing is cheaper for them, which caps your realized return. For callable bonds, also calculate yield-to-call using the call date and call price, and treat whichever figure is lower as the realistic expectation.

Why is my modified duration lower than my Macaulay duration?
Modified duration equals Macaulay duration divided by (1 + periodic yield). Since that denominator is always greater than 1, the division always shrinks the number somewhat, and the gap widens as yields climb. Macaulay duration is a time measure, in years; modified duration is the one you actually multiply by a yield change to estimate a price move.