The discount yield is a measure of a bond's percentage return used to calculate the yield on short-term bonds and treasury bills sold at a discount.

While the current yield and yield-to-maturity (YTM) formulas may be used to calculate the yield of a bond, each method has a different application—depending on an investor’s specific goals ...

Yield to maturity (YTM) is the annual expected return of a bond if held until maturity, also referred to as book yield.

Yield to maturity (YTM) is the total return expected on a bond if the bond is held until maturity.

Yield to Maturity is the estimated rate of return that an investor can expect from a bond. The value assumes that you hold the bond until maturity.

The formula for MMY is: MMY = (Discount/Purchase Price) x (360/Days to Maturity) The discount is the difference between the face value of the security and the purchase price.

This bond yield calculator shows current bond yield, as well as the yield to maturity. It also dives into core investing concepts behind the YTM formula.

So, since you were able to buy this bond at a discount to par value, its yield to call is actually more than if you hold the bond to maturity.

Money Market Yield Formula Money market yield is calculated using a formula that annualizes the return on short-term discount securities based on a 360-day year.

Yield to maturity (YTM) is the annual expected return of a bond if held until maturity, also referred to as book yield.

The size of the discount, the time to maturity and other features of money market securities may differ widely, making it difficult to directly compare the wide variety of money market securities.