(even if it is tendered at premium and matures at par, it is also not taken) In short, the time value of money is ignored.II. Yield to Maturity: Yield to Maturity (YTM) is the expected total return of a bond if the bond is held until the end of its life. It takes into account current coupon income and capital gain/loss if held to maturity. Yield to maturity calculations assume that all coupon payments are reinvested at the same rate as the bond's current yield. It takes into account the current market price, face value, coupon interest rate and time until maturity of the bond. YTM is a complex but accurate calculation of a bond's yield that can help investors compare bonds with different maturities and coupons. The yield to maturity is also often referred to as the “accounting yield” or “purchase yield.” Due to the complexity of the means of determining the yield to maturity, it is often difficult to calculate an accurate YTM value. Instead, one can approximate the YTM using a chart of bond yields. Due to the price value of a basis point, yields decrease as a bond's price increases, and vice versa. For this reason, actuarial yield can only be calculated by trial and error. Formula: The YTM calculation method can then be represented by the following formula.