Calculate the true yield to maturity for bonds trading below par value. See how price appreciation plus coupon payments combine for your total return.
Yield to Maturity (YTM) is the total return you'll earn if you hold a bond until it matures, assuming all coupon payments are reinvested at the same rate. For discount bonds (trading below par), YTM is higher than the coupon rate because you also gain from the price appreciation back to face value at maturity. This calculator uses an iterative approximation method to solve for YTM. The current yield shows just the coupon return; YTM adds the capital gain from buying below face value.