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what is the formula of yield to maturity. Lets again look at our yield to maturity example to understand what is the current yield. It is possible to get an approximate YTM for a bond using a bond yield table.
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Formula YIELD settlement maturity rate pr redemption frequency basis This function uses the following arguments. Discount Price Yield to Maturity Current Yield. Yield to Maturity Formula The following formula is used to calculate the yield to maturity of a bond or investment.
Approx Yield to Maturity C F-P n FP 2 150 1500 1200 10 1500 1200 2 1333.
It is the sum of all of its remaining coupon payments. The formulas purpose is to determine the yield of a bond or other fixed-asset security according to its most recent market price. N Years to maturity. The approximate yield to maturity for the bond is 1333 which is above the annual coupon rate by 3.
