Use our Bond Equivalent Yield Calculator to easily determine the annualized yield of a discount security, like a Treasury Bill, on a bond equivalent basis. This tool helps investors compare the returns of money market instruments with traditional bonds, providing a clearer picture of their true investment performance.
Formula:
The Bond Equivalent Yield (BEY) formula is used to convert the yield on a discount basis instrument to an annualized rate comparable to a coupon bond. It is typically calculated as:
BEY = ((Face Value - Purchase Price) / Purchase Price) * (365 / Days to Maturity)
- Face Value: The par value or maturity value of the bond or security.
- Purchase Price: The price at which the bond or security was purchased.
- Days to Maturity: The number of days remaining until the bond or security matures.