Calculate yield to maturity (YTM), current yield, Macaulay duration, and total return for any bond — plus a full price vs yield sensitivity table.
Bond Parameters
$
%
$
Enter the price you would pay today to buy this bond
Yield to Maturity
5.58%
10-year bond, $950 price, 5% coupon
Annual Coupon
$50.00
Current Yield
5.26%
YTM
5.58%
Total Coupon Income
$500.00
Capital Gain/Loss
+$50.00
Macaulay Duration
7.92 yrs
Price vs Yield Sensitivity
How this bond's price changes as market yields move ±300bps from the current YTM (—). Face value $1,000, coupon 5.00%, 10 years.
Market Yield
Bond Price
vs Current Price
Current Yield
Premium / Discount
Row highlighted in cyan represents the current YTM. Demonstrates the inverse relationship between bond price and yield.
Bond Types Reference
Overview of major bond categories, typical yields, credit risk, and tax treatment.
Bond Type
Issuer
Typical Yield
Credit Risk
Tax Treatment
Best For
US Treasury Bills
US Government
4–5.5%
None
Federal only
Capital preservation, short-term
US Treasury Notes & Bonds
US Government
4–5%
None
Federal only
Safe income, long-term
TIPS
US Government
Real 1–2%
None
Federal only (phantom tax)
Inflation protection
I-Bonds
US Government
CPI + fixed
None
Federal only (deferred)
Inflation hedge, $10k/yr limit
Municipal (Muni)
State/Local Gov
3–4.5%
Very Low
Often tax-exempt
High-income investors
Agency (GNMA/FNMA)
US Gov Agencies
4.5–5.5%
Near Zero
Fully taxable
Higher yield than Treasuries
Investment-Grade Corporate
BBB/Baa or better
4.5–6%
Low–Moderate
Fully taxable
Income with moderate risk
High-Yield (Junk)
BB/Ba or below
7–12%
High
Fully taxable
Aggressive income seekers
Emerging Market
Foreign Gov/Corp
5–10%
High
Fully taxable
Global diversification
Key Concepts
Yield Curve
Normally, longer-term bonds yield more than short-term bonds. An inverted yield curve (short rates higher) has historically preceded recessions.
Credit Spread
The extra yield a corporate bond pays over a Treasury of the same maturity. A widening spread signals increasing default risk in the market.
Callable Bonds
Some bonds allow the issuer to redeem them early. Yield to Call (YTC) may be more relevant than YTM for these bonds, especially when trading at a premium.
Convexity
Duration linearly approximates price change; convexity captures the curvature. Positive convexity means bonds gain more when rates fall than they lose when rates rise by the same amount.
Frequently Asked Questions
What is Yield to Maturity (YTM)?
YTM is the total annualized return you would earn if you bought the bond today and held it until maturity, assuming all coupon payments are reinvested at the same yield. It is the single most widely used measure of bond return, accounting for price, coupons, and the par redemption value.
How is YTM calculated?
YTM is the discount rate (r) that makes the present value of all future cash flows (coupons + face value) equal to the current bond price. There is no closed-form formula, so it must be solved iteratively. This calculator uses Newton-Raphson iteration for fast convergence.
Why do bond prices move opposite to yields?
When new bonds are issued at higher rates, existing bonds with lower coupons become less valuable. Their prices fall until their effective yield (YTM) matches the new market rate. This inverse relationship is the cornerstone of fixed income analysis.
What is Macaulay Duration?
Macaulay Duration is the weighted average time (in years) until you receive all of the bond's cash flows. It also measures interest rate sensitivity: a 7-year duration bond will lose approximately 7% in price if yields rise by 1%. Zero-coupon bonds have the highest duration (equal to their maturity).
What does it mean when a bond trades at a premium or discount?
A premium bond trades above face value — its coupon rate is higher than current market rates. A discount bond trades below face value — its coupon rate is lower than current market rates. At maturity, all bonds are redeemed at face value, so discount bonds produce a capital gain and premium bonds produce a capital loss.
Are municipal bond yields better after tax?
For high-income investors, yes. To compare a muni yield to a taxable bond, calculate the Tax-Equivalent Yield: Muni Yield / (1 - Tax Rate). For example, a 3.5% muni in the 32% bracket has a TEY of 5.15% — competitive with many corporate bonds.
What is the difference between coupon rate and yield?
The coupon rate is fixed at issuance and determines the dollar coupon payment. The yield (current yield or YTM) changes as the bond's market price fluctuates. A bond with a 5% coupon and a price of $950 has a current yield of 5.26% and a YTM that is higher still, because you also gain $50 at maturity.