Enter the face value of a bond, it’s current price, and the days to maturity into the calculator. The calculator will evaluate and display the bond equivalent yield.
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Bond Equivalent Yield Formula
The following equation can be used to calculate the bond equivalent yield.
BEY = [(FV – P) / P]* (365/d)
- Where BEY is the bond equivalent yield
- FV is the face value
- P is the current price
- d is the days to maturity
Bond Equivalent Yield Definition
A bond equivalent yield is a financial metric that is used to calculate the annual percentage yield for securities. This is used to understand the performance of a security when compared with just a typical bond.
Bond Equivalent Yield Example
How to calculate bond equivalent yield?
- First, determine the face value.
Calculate the face value of the bond.
- Next, determine the current price.
Calculate the current price of the bond.
- Next, determine the days to maturity.
Calculate the number of days until the bond matures.
- Finally, calculate the BEY.
Calculate the bond equivalent yield using the formula above.
A bond equivalent yield, or BEY for short, is the annual percentage that a bond yields on average.