Bond Yield Calculator
Calculate bond yield to maturity (YTM), current yield, duration, and price sensitivity. Compare taxable and municipal bond yields with tax-equivalent analysis.
Bond Details
Yield to Maturity
Trading at Discount
Yield Analysis
| Current Yield | 5.263% | Annual coupon ÷ Price |
| Yield to Maturity (YTM) | 5.662% | Total return if held to maturity |
| After-Tax Yield | 4.416% | After 22% tax |
Bond Metrics
| Premium/Discount | -$50.00 |
| Macaulay Duration | 7.93 years |
| Modified Duration | 7.71 |
| Price Sensitivity (1% rate change) | -$73.24 |
Total Return (If Held to Maturity)
| Total Coupon Payments | $500.00 |
| Capital Gain/Loss at Maturity | $50.00 |
| Total Return | $550.00 |
| Total Return % | 57.89% |
| Annualized Return | 4.67% |
Price Sensitivity to Yield Changes
| Yield Change | New Yield | New Price | Price Change |
|---|---|---|---|
| -2% | 3.66% | $1,111.22 | +$161.22 (17.0%) |
| -1% | 4.66% | $1,026.80 | +$76.80 (8.1%) |
| -0.5% | 5.16% | $987.49 | +$37.49 (3.9%) |
| 0% | 5.66% | $950.00 | +$0.00 (0.0%) |
| +0.5% | 6.16% | $914.23 | -$35.77 (-3.8%) |
| +1% | 6.66% | $880.09 | -$69.91 (-7.4%) |
| +2% | 7.66% | $816.39 | -$133.61 (-14.1%) |
Cash Flow Schedule
| Year | Coupon | Principal | Total |
|---|---|---|---|
| Year 1 | $50.00 | $0.00 | $50.00 |
| Year 2 | $50.00 | $0.00 | $50.00 |
| Year 3 | $50.00 | $0.00 | $50.00 |
| Year 4 | $50.00 | $0.00 | $50.00 |
| Year 5 | $50.00 | $0.00 | $50.00 |
| Year 6 | $50.00 | $0.00 | $50.00 |
| Year 7 | $50.00 | $0.00 | $50.00 |
| Year 8 | $50.00 | $0.00 | $50.00 |
| Year 9 | $50.00 | $0.00 | $50.00 |
| Year 10 | $50.00 | $1,000.00 | $1,050.00 |
Bond Yield Basics
Current Yield vs YTM
Current yield = Annual coupon ÷ Price. YTM includes capital gain/loss at maturity. For discount bonds, YTM > Current Yield. For premium bonds, YTM < Current Yield.
Duration
Duration measures interest rate sensitivity. A duration of 7 means a 1% rate increase causes ~7% price drop. Longer duration = more sensitivity to rate changes.
Municipal Bonds
Municipal bond interest is federally tax-exempt (and often state-exempt). Compare using tax-equivalent yield. Higher tax brackets benefit more from munis.
Frequently Asked Questions
Types of Bond Yields
| Yield Type | Formula | Use Case |
|---|---|---|
| Coupon Rate | Coupon ÷ Face Value | Stated rate on bond |
| Current Yield | Coupon ÷ Current Price | Income return only |
| YTM | Total return to maturity | Best comparison metric |
Understanding Duration
Duration measures interest rate risk:
- Short duration (1-3 years): Low rate sensitivity
- Intermediate (4-6 years): Moderate sensitivity
- Long duration (7+ years): High sensitivity
Rule of thumb: Duration × Rate Change = Price Change %
Premium vs Discount Bonds
- Premium: Price > Par (coupon > market rates)
- Discount: Price < Par (coupon < market rates)
- Par: Price = Face Value
Premium bonds have YTM < coupon rate. Discount bonds have YTM > coupon rate.
Municipal Bond Tax Advantage
Tax-Equivalent Yield = Muni Yield ÷ (1 - Tax Rate)
| Tax Bracket | 4% Muni Equals |
|---|---|
| 22% | 5.13% taxable |
| 24% | 5.26% taxable |
| 32% | 5.88% taxable |
| 37% | 6.35% taxable |