Calculate current yield, yield to maturity, yield to call, and bond duration with price/yield curve visualization.
A bond's coupon rate is printed on the bond; its yield is not. The return you actually earn depends on the price you pay, and that is what this calculator solves for. Enter price, face value, coupon, and maturity, and it returns current yield, yield to maturity, yield to call, and duration, plus a price/yield curve showing how price responds to yield changes. The thing first-time users get wrong: a bond bought below par shows a yield to maturity well above its coupon, because YTM counts the price gain at maturity as part of the return. Buying above par flips it around.
A concrete input and expected output from the current implementation.
Input
Face value $1,000; coupon 4% paid annually; 5 years to maturity; current price $960; callable at 103 after 3 years
Expected output
Current yield: 4.17% | Yield to maturity: 4.92% | Yield to call: 6.45% | Macaulay duration: 4.62 years (modified: 4.40) | Price/yield curve: price is 960 at a 4.92% yield and falls to about 957 at 5%
YTM is the discount rate that makes the cash flows, $40 per year for five years plus $1,000 at maturity, worth exactly $960 today, so it beats both the 4% coupon and the 4.17% current yield, which ignores the $40 principal gain. The call yield is higher still, 6.45%, because a call at 103 would pay $70 more than the purchase price within only three years.
YTM is the discount rate that makes the present value of every remaining payment, coupons and face value, equal the current price. There is no closed-form solution, so the calculator iterates: try a rate, price the bond, adjust until the computed price matches the entered price within a small tolerance. Current yield is simpler, annual coupon income divided by price, so it ignores any capital gain or loss at maturity.
Macaulay duration is the present-value-weighted average time to each cash flow: a 5-year coupon bond has duration below 5, while a zero-coupon bond's duration equals its maturity. Divided by 1 plus the per-period yield, it becomes modified duration, roughly the percentage price move per 1-point yield change. The price/yield curve plots price against yield, and because it bends, duration estimates hold only for small yield moves.
Because you are buying below par. The 4% coupon pays $40 a year, but you also bought $1,000 of principal for $960, gaining $40 at maturity. YTM is the single rate that turns all of those payments into today's price, so it reflects both income streams: 4.92% here. Buy the same bond above par and YTM would come in below the coupon instead.
The lower of the two is the safer planning figure. Issuers call when refinancing saves money, which shows up as the bond trading above its call price; above par, yield to call is usually the binding number. Not here: at 960 the bond sits below the 103 call price, calling would pay you $70 extra, so the issuer will not call and yield to maturity is the realistic expectation.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
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