Ytm формула в excel

YTM means yield to maturity. It is also known as the internal rate of return. If you are dealing with finances, this is one of the values you have to calculate when dealing with compound interest. For you to calculate YTM using Excel formulas, there are some values you need to have. These include the initial principal amount invested, the interest rate to be paid yearly, the time duration the principal amount has been invested, and the rate of daily, monthly or quarterly payments. With all these values available, Excel will calculate for you the YTM value using the RATE function.

This article gives you step-by-step instructions on calculating YTM in Excel workbooks using the bond yield calculator.

Steps to follow when calculating YTM in Excel using =RATE ()

Let us use these values for this example. You can replace them with your values. Face value =1000 Annual coupon rate =10% Years to maturity =10 Bond price =887. Now let us create the YTM using these values.

1. Launch the Microsoft Excel program on your computer.

2. Write the following words from cells A2 –A5. Future Value, Annual Coupon rate, Years to maturity, and Bond Price

3. Format the column width in the excel sheet so that it is wide enough to accommodate all characters.

4. Let us enter the corresponding values of our example in Column B. You can replace these values with your own.

5. Write YTM in cell A6.

6. Now, this is the crucial part. In the corresponding cell, B6 type the following formula =RATE(B4,B3*B2,-B5,B2) Press enter and the answer is the Yield to Maturity rate in %.

Using the Excel IRR Function

This function’s syntax is as follows

IRR (values, [guess])

It is broken down as follows;

IRR is the internal rate of return for a certain period. For instance, if it is calculated semi-annually, you can double the result to give you the annual bond returns.

Values represent the future bond cash flows. Values must be denoted with a negative and positive value. For instance, say the bond payment was $1000. This shall be written as -$1000 at the start of the payment period. At bond maturity, we shall be able to then calculate the period’s payment coupon and cash flow for future bonds.

Guess this value represents an arbitrary value (a guess value) of what your internal rate of return can be. Using this value is optional. for more lessons on how to calculate the internal rate of returns, click to read How to Calculate irr in Excel.

I inputted random numbers in the above template and you can see the values are tabulated at the end.  Therefore, with company information, you can easily calculate yields to maturity by inputting values in a template like the one above in excel.

Uses of YTM

It is important to understand YTM as it is used to assess expected performance. The golden principle here is that the expected bond return rate changes depending on the market price despite the constant coupon rate. It is used to reflect how favorable the market is for the bond. Hence it is vital for people to manage a bond investment portfolio.

The formula for pricing a bond

You can price a bond by using the following formula

PV = Payment / (1+r)+ Payment / (1+r)+ ..+ Payment + Principle / (1+r)

Syntax derivatives

Pv = Price of the bond

Payment =Also referred to as the coupon payment. This is the coupon rate * par value ÷ number of payments per year

r stands for the required rate of return. It’s actually the required rate of return divided by the number of payments per year.

N= Years until maturity

Principal= face value of the bond/par value

As you can see from the above formula the price of the bond depends on the difference between the coupon rate and inferred required rate and

Conclusion

The steps above are the manual way of calculating YTM in an Excel worksheet. It is a straightforward and easy process to accomplish once you know your values and the formula to apply.

In case you find it a challenge using the above method, you can calculate YTM using the RATE and IRR functions in Excel.

Whatever business you are running, every time you will be attracted to buy and selling bonds for financial deals. And for this, you will need to find out the Yield to Maturity YTM of the bonds. In this article, you will get to know how to calculate Yield to Maturity Excel with some Excel formulas.

For this, you will have to show the initial principal amount invested, the time in which the principal amount is invested, the interest rate you need to pay every year, or other monthly and quarterly payments.

Syntax of YTM

=YIELDMAT(settlement, maturity, issue, rate, pr, [basis])

In this formula, the arguments used are explained as:

Settlement: This is a required argument in which you get the settlement date of the security. This date is after the issue date because the security is then given to the buyer.

Maturity: This is also a required argument in which you get the maturity date of the security.

Issue: This is also a required argument in which you get the issuance date of the security.

Rate: This is a required argument in which you get the interest rate of the security at the issuance date.

Pr: This is a required argument as well, in which you get the price per $100 face value of the security.

Basis: This is an optional argument in which you get the count type.

How to Calculate Yield to Maturity Excel with RATE Function?

In the very first method of YTM, you will get to know how the RATE function can help us. Once all the arguments are done, the RATE function gives YTM. All the arguments are then multiplied by the Par Value of the Bond. Below are some easy-to-follow steps:

• Select the C9 cell.
• Enter the following formula in the given bar:

=RATE(C8,C7,-C6,C4)*C5

• Now, press the ENTER key from the keyboard.
• Your wanted outcome will be on the next screen.

How to Calculate Yield to Maturity Excel with Direct Formula?

Here you will see the use of a direct formula to find the YTM of a Bond in Excel. Below is the formula:

YTM=(C+(FV-PV)/n)/(FV+PV/2)

In this formula:

C= It appears as an Annual Coupon Amount.

FV= It appears as a Face Value.

PV= It appears as a Present Value.

N= It appears as a value of Maturity Years.

Considering our dataset, let’s see how this process works:

• Click on the C8 cell.
• Now, enter the formula given below in the selected cell:

=(C6+((C4-C5)/C7))/(C4+C5/2)

• Now, press the ENTER key from the keyboard.

You will see the outcome Yields to Maturity appear on the screen.

How to Calculate Yield to Maturity Excel with YIELD Function?

Excel has a YIELD function that can easily calculate the Yield to Maturity of a bond in Excel. Let’s start this procedure with a new dataset. In this method, you will notice that the YIELD function extracts every single value from the dataset as arguments and gives the YTM values in the selected cells.

Below are simple steps to follow:

• Choose the C11 cell.
• Add the following formula in the selected cell:

=YIELD(C6,C7,C5,C10,C4,C8)

• Now, press the ENTER key from the keyboard.
• You will find the results in front of you.

A Few Considerations about the YIELDMAT Function

• You may encounter #NUM! error if:

The issuance date is greater than or equal to the date of settlement. Or

The settlement date is greater than or equal to the maturity date. Or

The pr, rate, or basis arguments have invalid numbers, such as rate < 0; pr ≤ 0, or [basis] has numbers other than 0, 1, 2, 3, 4).

• You may encounter #VALUE! error, if:

The issuance, settlement, or maturity dates are not valid Excel dates. Or

The given arguments are non-numeric.

Summary:

In this post, you have learned how to calculate yield to maturity Excel easily by using multiple approaches. Each method is worthy enough to use for this calculation. Try new tricks and continue exploring Excel.

Understanding a bond’s yield to maturity (YTM) is an essential task for fixed-income investors. But to fully grasp YTM, we must first discuss how to price bonds in general. The price of a traditional bond is determined by combining the present value of all future interest payments (cash flows), with the repayment of principal (the face value or par value) of the bond at maturity.

The rate used to discount these cash flows and principal is called the «required rate of return,» which is the rate of return required by investors who are weighing the risks associated with the investment. 

How to Price a Bond

The formula to price a traditional bond is: 

PV

=

P

(

1

+

r

)

1

+

P

(

1

+

r

)

2

+

⋯

+

P

+

Principal

(

1

+

r

)

n

where:

PV

=

present value of the bond

P

=

payment, or coupon rate

×

par value

÷

number of

payments per year

r

=

required rate of return

÷

number of payments

per year

Principal

=

par (face) value of the bond

n

=

number of years until maturity

begin{aligned} &text{PV} = frac { text{P} }{ ( 1 + r ) ^ 1 } + frac { text{P} }{ ( 1 + r ) ^ 2 } + cdots + text{P} + frac { text{Principal} }{ ( 1 + r ) ^ n } \ &textbf{where:} \ &text{PV} = text{present value of the bond} \ &text{P} = text{payment, or coupon rate} times text{par value} div text{number of} \ &text{payments per year} \ &r = text{required rate of return} div text{number of payments} \ &text{per year} \ &text{Principal} = text{par (face) value of the bond} \ &n = text{number of years until maturity} \ end{aligned}

​PV=(1+r)1P​+(1+r)2P​+⋯+P+(1+r)nPrincipal​where:PV=present value of the bondP=payment, or coupon rate×par value÷number ofpayments per yearr=required rate of return÷number of paymentsper yearPrincipal=par (face) value of the bondn=number of years until maturity​

The pricing of a bond is therefore critically dependent on the difference between the coupon rate, which is a known figure, and the required rate, which is inferred.

Suppose the coupon rate on a $100 bond is 5%, meaning the bond pays $5 per year, and the required rate—given the risk of the bond—is 5%. Because these two figures are identical, the bond will be priced at par, or $100.

This is shown below (note: if tables are hard to read, hover over the graphic and select the magnification icon):

Pricing a Bond After It’s Issued

Bonds trade at par when they are first issued. Frequently, the coupon rate and required return don’t match in the subsequent months and years because events impact the interest rate environment. A failure of these two rates to match causes the price of the bond to appreciate above par (trade at a premium to its face value) or decline below par (trade at a discount to its face value) in order to compensate for the rate difference.

Take the same bond as above (5% coupon, pays out $5 a year on a $100 principal) with five years left until maturity. If the current Federal Reserve rate is 1%, and other similar-risk bonds are at 2.5% (they pay out $2.50 a year on a $100 principal), this bond looks very attractive: offering 5% in interest—double that of comparable debt instruments.

Given this scenario, the market will adjust the price of the bond proportionally, in order to reflect this difference in rates. In this case, the bond would trade at a premium amount of $111.61. The current price of $111.61 is higher than the $100 you will receive at maturity, and that $11.61 represents the difference in the present value of the extra cash flow you receive over the life of the bond (the 5% versus the required return of 2.5%). 

In other words, in order to get that 5% interest when all other rates are much lower, you must buy something today for $111.61 that you know in the future will only be worth $100. The rate that normalizes this difference is the yield to maturity. 

Calculating the Yield to Maturity in Excel

The above examples break out each cash flow stream by year. This is a sound method for most financial modeling because best practices dictate that the sources and assumptions of all calculations should be easily auditable. However, when it comes to pricing a bond, we can make an exception to this rule because of the following truths:

• Some bonds have many years (decades) to maturity, and a yearly analysis, like that shown above, may not be practical
• Most of the information is known and fixed: We know the par value, we know the coupon, and we know the years to maturity.

For these reasons, we’ll set up the calculator as follows:

In the above example, the scenario is made slightly more realistic by using two coupon payments per year, which is why the YTM is 2.51—slightly above the 2.5% required rate of return in the first examples.

As you might guess, one of the domains in which Microsoft Excel really excels is finance math. Brush up on the stuff for your next or current job with this how-to. In this tutorial from everyone’s favorite digital spreadsheet guru, YouTube’s ExcelIsFun, the 49th installment in his «Excel Finance Class» series of free video lessons, you’ll learn how to calculate YTM & effective annual yield from bond cash flows.

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