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How to Calculate Yield to Maturity in Excel

Yield to maturity (YTM) is the total return expected from a bond if the investor holds it until maturity, taking into account the current market price, coupon payments, and the face value of the bond.

YTM is academically defined as market interest rate, but means Yield to Maturity. It actually takes purchase price, the value of redemption, time between payment of interest, and the yield of coupon.

Data preparation

We will calculate the YTM at ease, and you need a data that looks like this:

Important Note: It is extremely important that the frequency is 1 – 4, and the basis is 1 – 3. This would guarantee the calculation of the YTM being successful.

Yield formula creation

Click beside Yield (B11) (1), type =YIELD(B4;B5;B6;B7;B8;B9;B10) (2), and press enter.

Note: You can now format the yield to any format you want.

IRR formula creation

Prepare your data:

Enter the formula:

Press Enter:

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