Oct 24, 2018 0 Comments

Bond Equivalent Yield Calculator is a tool that helps an investor to evaluate the annual yield of a bond sold on discount

- Bond Equivalent Yield:
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Background Information

- What does Bond Equivalent Yield mean?
- The bond equivalent yield formula is used to determine the annual yield on a discount, or the zero coupons, bond. While making investment decisions, comparing the yield or returns on the investment choices in relative terms is important.

- Formula
- Bond Equivalent Yield = ((Par Value - Price) / Price) * (365 / d) * 100

- Example
A bond has a par value of $2,000, purchased at a discounted price of $1,900 and has 100 days to maturity.

According to the formula, Bond Equivalent Yield is:-

- (($2,000 - $1,900) / $1,900) * (365 / 100) * 100
- ($100 / $1,900) * 3.65 * 100
- 0.0526 * 3.65 * 100
- Bond Equivalent Yield = 19.21%

- Jun 10, 2018
- Tool Launched

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