percentage a security yields at maturity when sold at a discount

The yield or annual interest rate on a security sold to an investor at a discount. A bond that is sold at $4875 that matures to $5000 has a discount of $125. To calculate the discount yield: (discount divided by the face value of the security) multiplied by the (number of days in the year divided by the number of days to maturity).

The yield on a security sold at a discount. U.S. treasury bills are sold at a discount. The face amount is returned to the investor at maturity. The annual yield is computed by dividing the discount by the face amount, then multiplying by the number of days in the year (360) and dividing by the number of days to maturity. For example, a note purchased for $950 that returns $1,000 at maturity 11 months later. The note pays no interest; instead, your entire return is determined by the amount of the discount ($50 in this example). Banker's acceptances, commercial paper, and other short-term instruments frequently use this approach to compensate the buyer.

Yield on a discount security (most notably T-bills). The computation of a discount yield differs from the calculation of yield to maturity on interest bearing securities. Therefore, one must adjust the discount yield in order to compare it with yields on interest bearing securities. See: Discount, Bond Equivalent Yield, Yield to Maturity.

A formula for calculating yield on a discount instrument.

A yield obtained by dividing a security's discount by its face value, multiplying that number by the approximate number of days in the year (360), divided by the number of days left to maturity. The figure provides the interest on a security's face value instead of on the amount of money invested. discount / face amount x 360 / days to maturity

The discount yield is the yield on a security that is sold at a discount to its face value. U.S Treasury bills are commonly sold at a discount. The annual yield on the security is calculated by dividing the discount by the face amount and multiplying that number by the approximate number of days in the year. The result is then divided by the number of days to maturity.

Yield on a security sold at a discount--most notably T-bills. To calculate the annual yield, divide the discount by the face amount and multiply that number by the approximate number of days in the year divided by the number of days to maturity. See: Yield To Maturity