Yield to maturity

Yield to maturity is a way to measure how much money you will make from an investment. It measures how much return you will get when you buy a bond and how much money you will get from it when it matures (expires). To get the yield to maturity, you add up all the interest payments you will make from the bond, plus what you will get back when it matures (usually the same amount you paid for the bond). This number is then divided by the amount you paid for the bond and a percentage is calculated. That percentage is your yield to maturity. It is like the interest rate you will earn on the bond.