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Annualized Yield on a Discounted Security

Annualized Yield on a Discounted Security is used to determine the equivalent annual yield on a short term bond, typically a treasury note, that is sold at a discount to its redemption value, with a term of less than one year. Use the annualized yield on a discounted security calculator below to solve the formula.

Annualized Yield on a Discounted Security Definition

Annualized Yield on a Discounted Security is the annual rate of return received by an investor purchasing a discounted security of a term less than one year.

Variables

D=Number of days to maturity
R=Annualized yield as a percentage
P=Price of discounted security as a percentage of maturity value


 

Annualized Yield on a Discounted Security Formula