7
Lender Directory 3 Lender 7 Mortgage 4 Mortgage 6search4 Mortgage 4search_searchsearch Lender e Mortgage d Lender r Directory s Www a Mortgage c Www Www Msearchr Mortgage gsearchgsearch Mortgage searchi Mortgage e Mortgage t Mortgage ry
t Mortgage M0rt0a Www e Directory g Mortgage e Mortgage r Mortgage h Lender 81337844624843_R3 Lender R Mortgage Lender search
How to Calculate a Yield to Maturity Loan
The yield on a variable-price loan or bond is calculated using the yield to maturity equation. This equation uses the current market price, the time to maturity of the bond, the payments and the face value of the bond in determining the bond's actual return rate. This equation is commonly used by investment firms to determine whether bonds are a good value in the general market and how to appropriately price the bonds in their inventory.
Other People Are Reading
Instructions
-
-
1
Subtract the face value (F) of the bond from the current market price (P). For example, if F is $100 and P is $90, then P - F = -$10.
-
2
Divide this value by the number of years to maturity (n), as in (F-P)/n. If n = 5, then (F-P)/n = -$2.
-
-
3
Add the interest payment (C) to this value, as in C +(F-P)/n. If C is $5, then C +(F-P)/n = $3.
-
4
Divide the combined amount from Step 3 by the price plus face value divided by 2, as in (C +(F-P)/n) / ((F+P)/2). That is, 3 divided by 95 ($100 plus $90 divided by 2) equals .0315789.
-
5
The final value from Step 4, multiplied by 100 to get a percentage, is the yield to maturity. Yield to maturity = (C +(F-P)/n) / ((F+P)/2). In the example, the yield to maturity equals 3.158 percent.
-
1
References
- Photo Credit calculator chart image by max blain from yWww Mortagagemortgagelender B Mortgage Mortgage Lender Mortgage Mortgage Lender Mortgage Mortgage Lender Szh Directory Mortgage Mortgage Lender How to Calculate a Yield to Maturity Loan | eHow.comv k Lender pWww Mortagagemortgagelender B Mortgage Mortgage Lender Mortgage Mortgage Lender Mortgage Mortgage Lender Szh Directory Mortgage Mortgage Lender How to Calculate a Yield to Maturity Loan | eHow.comt k h h Mortgage Mortgage Lender Mortgage Mortgage Lender Mortgage Mortgage Lender