Bond Equivalent Yield Calculator

How to Use the Calculator

1. Enter the face value of the bond in the "Face Value" field.
2. Enter the purchase price of the bond in the "Purchase Price" field.
3. Enter the annual coupon rate of the bond in the "Annual Coupon Rate" field.
4. Select the payment frequency of the bond from the "Payment Frequency" dropdown.
5. Click the "Calculate" button to compute the Bond Equivalent Yield (BEY).
6. The result will be displayed in the "Result" section.

Understanding Bond Equivalent Yield (BEY)

Bond Equivalent Yield (BEY) is a measure of a bond's annual yield, expressed as a percentage. It is used to compare the yields of different bonds that have different payment frequencies. BEY is particularly useful for comparing zero-coupon bonds and coupon-paying bonds.

The formula for calculating BEY is:

BEY = (Annual Coupon Payment + (Face Value - Purchase Price) / Number of Days to Maturity) / (Purchase Price / Number of Days in Year)

Where:

• Annual Coupon Payment is the total coupon payment received in one year.
• Face Value is the principal amount of the bond.
• Purchase Price is the price at which the bond was purchased.
• Number of Days to Maturity is the number of days until the bond matures.
• Number of Days in Year is the number of days in the year (typically 365).