Yield to Maturity Calculator is an online tool for investment calculation, programmed to calculate the expected investment return of a bond. This calculator generates the output value of YTM in percentage according to the input values of YTM to select the bonds to invest in, Bond face value, Bond price, Coupon rate and years to maturity
Definition
The term Yield to Maturity also called as Redemption Yield often abbreviated as YTM and used when it comes to bond funds, is defined as the rate of return obtained by buying a bond at the current market price and holding it to maturity. Yield to Maturity is the index for measuring the attractiveness of bonds. When the price of the bond is low the yield is high and vice versa. YTM is beneficial to the bond buyer because a rising yield would decrease the bond price hence the same amount of interest is paid but for less money. Where the coupon payment refers to the total interest per year on a bond. Yield to maturity can be mathematically derived and calculated from the formula
YTM is therefore a good measurement gauge for the expected investment return of a bond. When it comes to online calculation, this Yield to Maturity calculator can help you to determine the expected investment return of a bond according to the respective input values. YTM deals only with the time-value-of-money calculations between the price, coupons and face value of the bond at hand, not with other potential future investments. If the coupons and face value are paid as promised the bond earns its yield-to-maturity