What the Bond Yield Calculator does
This bond yield calculator works out a bond's current yield, yield to maturity and, for callable bonds, yield to call and yield to worst, from the coupon, coupon frequency, dates and the quoted clean price. It also gives the accrued interest you pay the seller, the dirty (invoice) price, the previous and next coupon dates, a modified duration and a price-yield curve.
The yield to maturity follows the conventions of the spreadsheet YIELD function - coupon dates counted back from maturity, the day-count basis you choose, and simple discounting when only one coupon remains - so the result can be checked against a spreadsheet or a broker's screen for the same inputs.
How to use it
- Enter the coupon rate, how many coupons a year, the maturity date and the day-count basis in the bond's terms (US corporates usually use 30/360; government bonds usually actual/actual).
- Enter the settlement date - the date you pay and receive the bond, not the trade date - and the clean price quoted per 100 of face value.
- For a callable bond, open the call section and add the first call date and call price.
- Read the yield to maturity, compare it with the current yield and yield to call, and check the accrued interest that will be added to the price you pay.
Reading the results
Yield to maturity is the single annual rate, compounded at the coupon frequency, that makes all remaining coupons and the redemption payment worth the price today. It assumes you hold to maturity, every payment is made, and coupons can be reinvested at the same yield.
Current yield only divides the annual coupon by the price. It ignores the gain or loss as the price moves to 100 at maturity, so it understates the return on a discount bond and overstates it on a premium bond.
Modified duration estimates how much the price moves for a 1-point change in yield. A duration of 6.7 means roughly a 6.7% price fall if yields rise by one percentage point.
Worked example: the spreadsheet YIELD example
A bond pays a 5.75% coupon twice a year and matures on 15 November 2016. It settles on 15 February 2008 at a clean price of 95.04287, using US 30/360. The yield to maturity is 6.500%, the same figure the spreadsheet YIELD documentation gives.
The previous coupon was 15 November 2007 and the next is 15 May 2008. On 30/360 that is 90 days accrued out of 180, so accrued interest is 2.875 x 90 / 180 = 1.4375 per 100. On 1,000 of face value you pay 950.43 plus 14.38 accrued, a dirty price of 964.80.
The current yield is 5.75 / 95.04287 = 6.050%, lower than the YTM because the bond will be repaid at 100, above the price paid. For comparison, a 6% annual-coupon bond bought at 105 and callable at 100 in two years has a yield to maturity of 5.29% but a yield to call of only 3.37% - the root of 105 = 6 / (1 + y) + 106 / (1 + y)^2.
Formulas and scoring rules
- Current yield
current yield = annual coupon / clean price- Price for a yield (more than one coupon left)
P = R / (1 + y/f)^(N - 1 + DSC/E) + sum over k = 1..N of C / (1 + y/f)^(k - 1 + DSC/E) - C x A / EC = 100 x coupon / f, R redemption per 100, N coupons left, A days accrued, DSC days to next coupon, E days in the period.- One coupon or less left
P = (R + C) / (1 + (DSC/E) x y / f) - C x A / E- Yield to maturity
the y that makes P equal the clean priceSolved by bisection to 1e-14; shown to 3 decimals of a percent.- Accrued interest
AI = face x coupon / f x A / E- Yield to call
same formula with the call date as maturity and the call price as R
Clean price, dirty price and day counts
Bond prices are quoted clean, without the interest that has built up since the last coupon. The buyer pays the clean price plus accrued interest - the dirty price - and then receives the whole next coupon. Quoting clean prices stops the price jumping every time a coupon is paid.
How the days are counted is set in the bond's terms. 30/360 treats every month as 30 days; actual/actual uses real calendar days in the coupon period. The choice changes the accrued interest and, slightly, the yield, so use the basis in the prospectus.
Limitations: what the result does not prove
- It assumes every coupon and the redemption are paid in full and on time. It says nothing about the issuer's credit risk.
- Yield to maturity assumes coupons are reinvested at the same yield, which rarely happens exactly.
- Irregular first or last coupon periods, floating-rate and inflation-linked bonds, sinking funds and business-day adjustments are not modelled.
- Prices and yields are ones you enter; the page has no market data and does not recommend any bond.
Privacy: where your data goes
Everything you paste, type or drop is processed in this browser tab. It is not uploaded, logged, stored or sent to analytics. Session recording and tag-manager scripts are switched off on this page.
Standards and sources
- Microsoft Support - YIELD function - checked 19 Sep 2026
- Microsoft Support - PRICE function
- Investor.gov (US SEC) - bonds
Frequently asked questions
What is the difference between coupon rate and yield to maturity?
The coupon rate is fixed when the bond is issued and sets the cash payments. Yield to maturity depends on the price you pay today. Buy below 100 and the yield is above the coupon; buy above 100 and it is below.
Why is yield to call lower than yield to maturity?
For a bond bought above its call price, being called early means you lose the premium sooner, over fewer years of coupons. That cuts the return. Issuers tend to call when rates have fallen, which is exactly when premium prices occur, so yield to worst is the cautious figure to use.
What is accrued interest and why do I pay it?
It is the share of the next coupon that belongs to the seller, for the days since the last coupon date. You pay it at settlement and then receive the full coupon on the next payment date, so over the holding period you end up with only the interest for the days you owned it.
Which day-count basis should I choose?
Use the one in the bond's documentation. US Treasuries and many government bonds use actual/actual; US corporate and municipal bonds commonly use 30/360; money-market instruments often use actual/360. The calculator supports all five spreadsheet bases.
Is yield to maturity the return I will actually get?
Only if you hold to maturity, the issuer pays everything and you reinvest every coupon at that same yield. Selling early, reinvesting at different rates, taxes and default all change the realised return.
What does modified duration tell me?
It is the approximate percentage change in price for a one-point change in yield. With a duration of 6.7, a rise in yield from 6.5% to 7.5% would cut the price by roughly 6.7%. The price-yield chart shows the curve is not quite a straight line.
Last reviewed by the A2Z.Tools team against the sources listed above.
