Simple Yield Calculator

Enter only two of the below fields to calculate the third

Percentage Yield:
% of cost recouped each year
Actual Yield: $ annual revenue
Cost: $ Market value



The definition of Yield is actually simple. Yield means return on investment. However it can be alot broader than that. You can have percent yield on mass in chemical equations, and the list is endless. We find yield in almost every facet of life, we just don’t realise it.

In the case of stocks and yield, we are talking about the dividend received per share divided by the price of the actual stock in question, per share. If we are talking about bonds then things are slightly different again. Often the yield of the bond is the same as the interest rate the bond/investment pays to you. This might seem confusing at first but it really is quite an easy concept to understand.

We go into a simple yield calculation below and the online yield calculator is below that.

There are really only 3 parts to the equation:

  • The Percentage Yield – this is percentage of the overall costs of the property/investment/stock that the annual return will be. The smaller this number, the more expensive the investment is.
  • The Cost – The total cost of the property/investment/stock. Also sometimes known as purchase price.
  • The Actual Yield – The dollar value of annual return on investment.



The equation itself can be represented in different forms depending on what value you are looking for:

1) Finding Cost if you have Percentage Yield and Actual Yield.

yield calculator

2) Finding Percentage Yield if you have Cost and Actual Yield.

calculating the percentage yield

3) Finding Actual Yield if you have Percentage Yield and Cost.

calculating actual yield

Such a simple equation but it causes alot of confusion.

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Annuity Calculator

Annuity Calculator – An Introduction

Before we get into an annuity calculator, let us first understand the concept of annuity. An annuity is an investment vehicle that is sold by a commercial financial institution. An institution will accept an annuity payment from an investor, at one point  of time, and then pay out a stream of income on those annuities, until the time of death of the investor. Annuities are mostly used to plan for retirements, where older people wish to live off a fixed income that they will receive as a result of their annuity investment in their younger days.

While the concept of annuities is very convenient, deciding on the annuity amount can be quite tricky. That is where an annuity calculator comes into the picture. It will help the investor see what sort of payments they will get at a later point in life. An annuity calculator will make use of several factors such as age, gender, and tax rate to give you an idea of how much you will have to invest in an annuity, to get a particular payment on a monthly basis, during your retirement years.

A word of caution about using annuity calculators

While an annuity calculator will definitely give you a starting Annuity calculatorpoint to plan your retirement income, it will generally be a good idea to sit down with a financial planner to finalize your annuity amount. This is important because there are several factors that will not be considered in an annuity calculator. For example, most annuity calculators will not use the tax rate that is applicable to a certain individual. A financial advisor is a safer way to plan for your retirement as he or she will be able to give you a good idea of how much cash flow you will need to sustain a certain lifestyle. If you went about planning your annuity payments on your own, you could shortchange yourself and not have enough to support yourself in your retirements years, as you might have invested too little.

Examples of results from an annuity calculator

Let us say that you are a 50 year old male in the State of Georgia who wants to receive $1,000 in monthly payments, for the rest of your life. For that to happen, you will need to invest over $224,000 in annuity investments.

If you are a 50 year old female in the state of Georgia who wants the same $1,000 monthly payment for the rest of your life, you will need to invest $236,000 into annuity investments.

The amount of investment into annuities to receive $1,000 in monthly payments will begin to decline as the age increases. For example, a 65 year old man in Georgia will only have to invest $165,000 into an annuity investment to receive $1,000 in monthly payments or cash flow.

The examples above are results provided by an annuity calculator that uses a fixed rate of return. However, there are some annuities that are calculated with a variable rate of return that is based on the performance of the annuity fund. While such funds may result in higher monthly payments, they also have the risk of going belly up or result in lower yields that will result in lesser monthly payments over time.

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Bond Yield Calculator

Fill in the four fields below then click ‘Calculate’

Current Price:
Par Value:
Coupon Rate:
%

Years to Maturity:
Current Yield:
%

Yield to Maturity:
%

Bond Calculator

Investing in bonds can be quite tricky as you will need a good handle on many financial concepts such as yield, maturity date, face value, yield to maturity and cash to be paid at the time of maturity. Thankfully, the Internet is full of websites that will give you free access to a bond calculator, that will make the calculations for you.

But, even to use a bond calculator, you will need to understand the basic concepts that are applied by the bond calculator.

How does a bond calculator work? Elements used for calculation in a bond calculator

Yield% – This element is used to describe the income that is earned on an investment. The yield % is usually an indicator of dividend or interest that is received from a particular investment type. In the case of bonds, yield % refers to the interest rate.

This is how the yield on a bond is calculated. Let us take an example where a bond is bought at $1,000 par value, at a 10% coupon rate. In this case, the bond yield is simply calculated as $100/$1,000. Now, let us assume that the price of the bond drops to just $800. In this case, the bond yield will go up to 12.5%. On the other hand, if the price of the bond goes up to $1,200, the bond yield will drop to a figure just over 8%.

Yield to maturity – This is another very important factor that is used in a bond calculator. The example mentioned above is a very simple one. However, yield to maturity will require a more complex calculation. When calculating yield to maturity, it is assumed that the investor will hold the bond until the day it matures. So, it is also assumed that any interest earned on the bond is reinvested back into the same bond. In essence, yield to maturity is like applying compound interest to the investment while the above mentioned example is a simple depiction of how simple interest would be applied in a bond calculator. The yield to maturity will also include any profits or gain that the investor made, by buying the bond at a discount, if they did.

Calculating yield to maturity is not something that the general public will be able to do, or at least successfully do. This is where a bond calculator will be very handy as it will spit out what you need quite easily.

How is bond price and yield linked to one another by a bond calculator?

In general, bond price and yield are inversely linked to one another. In other words, if the price of a bond falls, the yield will increase. Bond Yield CalculatorIf the yield decreases, the price of the bond will increase. The price of a bond is also linked to the interest rates that are available in the market. If the interest rates of the economy increase, the price of the bonds will fall and lead to an increase in yield. On the other hand, when interest rates decrease, the price of the bond will increase and the bond yield will reduce.

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High Dividend Stocks

High Dividend Stocks

In the world of investing, dividend stocks stand apart from most investment vehicles because dividend stocks allow the investor to get a part of the company’s profits. That is not something you can say of most investment vehicles.

Below, we will give you a brief introduction to dividend stocks and high dividend stocks in particular.

What is a dividend?

Most public companies do not pay dividends. However, some companies, like Microsoft, will pay out dividends to their stock holders, where the stock holders are able to get a chunk of the company’s profits. One will have to carefully look through stocks in the market to find good dividend paying stocks. Finding good high dividend stocks can be even more difficult as there are few companies that still issue high dividend stocks, especially in today’s economy. Dividends can be paid at any time and in any amount, at the discretion of the company’s management.

Terms to understand about high dividend stocks

Dividend yield – A dividend yield is simply calculated by dividing the actual dividend amount by the stock price. The higher the dividend yield, the more the chances of a stock being considered as one of the few high dividend stocks in the market today.

What are some of the high dividend stocks that are available in the market today?

When one begins to hunt for high dividend stocks, they will often find that high dividend stocks are often offered in only a few select industries. Some of the most popular industries that have been known to issue high dividend stocks are industries such as real estate, telecommunications, utility companies and certain financial companies. Of late, it would be extremely difficult to find high dividend stocks in the financial industry as the whole finance industry is still crippled and trying to recover from the Sub-Prime crisis.

Apart from the above mentioned industries, high dividend stocks are also issued by companies that are profitable but also experiencing  very little growth. Such companies will not have opportunities to reinvest their profits and will instead deploy the profits in the form of dividends that are paid out through high dividend stocks. For companies such as the ones just described, high dividend stocks will give them an option to keep shareholders happy. Shareholder might otherwise leave as there is not much room for the company’s stock price to appreciate.

It is important to look for high dividend stocks that will continue to grow

When hunting for high dividend stocks, it is very important that an investor not fall for high dividend stocks that simply pay some of the highest dividends in the market today. Instead, they should look for high dividend stocks whose stock price will continue to grow in the future.

Why some high dividend stocks are risky?

We just mentioned that you must be a little careful about choosing high dividend stocks. If you blindly pick high dividend stocks by selecting stocks with a high dividend yield %, you could be selecting stocks with a very low share price as opposed to picking stocks that pay good dividends.  You must only look for stocks that have a high dividend yield and also a share price that is very competitive in the market.

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Mutual Funds

Mutual Funds – An Introduction

Whether you are a savvy investor or just a beginner who wants to gets his or her feet wet in the investing world, there is a good chance that you know about mutual funds. By definition, mutual funds are investment vehicles that will allow you to buy investment holdings in various companies and markets, by buying just one investment vehicle.

For example, instead of buying separate stocks in hundreds of technology companies, one can simply invest in mutual funds with a technology portfolio. Below, you will find a few basic details about mutual funds that will help you understand the popular investment vehicle better.

How to choose mutual funds?

This is a very objective question that will depend on so many factors that are relative to you. For example, the choice of mutual funds for you will depend on factors such as your willingness to take risks, your investment horizon, your preferences to invest in certain markets and so on. So, if you are a investor who is interested in the communications industry and have a 10 year investment horizon and are also willing to take a fair amount of risk, you will look for mutual funds that have that similar criteria. The market is full of a diverse set of mutual funds and there is a very good chance that one of those mutual funds will match your needs, or at least come very close to matching your needs.

Be aware of risk

Though mutual funds are supposed to be baskets of investments in various sectors, industries and companies, they still do carry a fair amount of risk, especially in today’s market condition. So, when investing in mutual funds, one should always perform their due diligence to gauge the risk factor. Again, this will vary from person to person, depending on their investing aggressiveness and ability to take risks.

Invest in many mutual funds

This point of advice is along the lines of the tip that was just mentioned above. Though there are some large mutual funds that have a great diversification factor, it might still be a good idea to invest in many mutual funds, as opposed to dropping all your investment on one large mutual fund. When it comes to diversification in investment, there really is no maximum or what you call as overdoing, as long as the mutual funds or other investment vehicles are chosen with diligence.

Costs of investing in mutual funds

Mutual funds are put together by financial companies who will charge you for the convenience offered by mutual fund vehicles. Common fees will include front load and back load expenses. What this essentially means is that you will have to pay a %, typically about 5%, as a fee, when you get in and out of mutual funds. So, if you are investing $10,000 in mutual funds, you will have to pay $500 as a front load fee and invest the remaining $9,500 into the mutual funds. When you sell your mutual funds, you will again have to pay 5% of the sale price as a fee.  The fee structures varies from fund to fund and some funds will also charge you an expense ratio, where you will pay about 1-2% of your investment amount as ongoing expenses, for the duration of your investment in that particular fund.

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Dividend Yield

An Introduction to Dividend Yield

If you are investing in dividend stocks, it is very important that you know about dividend yield. This article will give you an introduction to dividend yield and it will also give you a few pointers on how to avoid stocks with risky dividend yields.

What is dividend yield?

The dividend yield is one of the key metrics that is looked at when an investor is considering investments in various dividend stocks. The formula to calculate dividend yield is very simple. To get the dividend yield, one will simply have to divide the annual dividend amount by the current stock price.

Example of dividend yield

Though the above mentioned formula for dividend yield might have been quite easy to grasp, it is always a good idea to look at an actual example with numbers.

Let us say that a dividend paying stock trades in the market for $20. Now, one might want to know the yield of that dividend stock before they consider it for purchase. A quick look at the financial statement tells the investor that the particular stock paid out $1 in annual dividends. In this case, the dividend yield is very simply calculated as 5%, after the annual dividend is divided by stock price; i.e., $1/$20.

 If a stock has a high dividend yield, does it make it a good stock?

A high yield does not make a dividend stock a better stock than a dividend paying stock with a lower yield. If anything, one should be cautious about a high yield dividend stock, for the following reasons.

Some companies will have a high yield on their dividend stock that will look attractive. However, upon Dividend Yieldcloser analysis, the investor might discover that the stock price has recently taken a beating, thereby artificially pushing up the yield. Using the above mentioned example, let us assume that the company had a very poor year, which resulted in the stock price dropping to $10, all the way from $20. Now, if the investor only looked at the dividend yield, which is now 10%, it looks like a very attractive stock when in reality it is a very poor stock, as the stock price has fallen by 50%.

One should also be very careful about choosing dividend stocks that do not have a long history of paying dividends. Dividend stocks are attractive only when the company has paid consistent dividends, over a long period of time. One of the most ideal dividend stocks is Microsoft, which has been very solid with dividend payments, even during tough times.

This does not mean that dividend stocks with a short history are no good. It is just that one has to proceed with caution when they are buying dividend stocks that do not have an established track record.

After considering the track record and dividend yield of a stock, one must also look at the future potential of a company. Will it remain profitable? Will it continue to grow? Will it generate enough cash to keep paying dividends? These are just some of the questions that need to be answered before one picks up a dividend stock.

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