## Calculating the Real Return of Your Bonds: Beyond the Coupon You See
When evaluating where to invest your money in fixed income, the advertised coupon is only half the story. The true yield depends on another factor that most ignore: the price at which you buy the bond. This is where the **YTM formula** —or Yield to Maturity— comes into play, a metric that shows you the actual return you will get.
### Why is the YTM different from the promised coupon?
Imagine two bonds: one pays an 8% coupon but is purchased at an inflated price (107 €), another pays 5% but is bought cheaply (94 €). Which o
View OriginalWhen evaluating where to invest your money in fixed income, the advertised coupon is only half the story. The true yield depends on another factor that most ignore: the price at which you buy the bond. This is where the **YTM formula** —or Yield to Maturity— comes into play, a metric that shows you the actual return you will get.
### Why is the YTM different from the promised coupon?
Imagine two bonds: one pays an 8% coupon but is purchased at an inflated price (107 €), another pays 5% but is bought cheaply (94 €). Which o