How you calculate the yield for your bond will depend on whether that bond has a coupon rate or if that bond is a zero-coupon bond.

Bonds with Coupon Rates

To calculate a bond's adjusted current yield, you need to know the values of the following four things:

- Coupon: Annual coupon rate

- Price: Current market price of the bond

- Face Value: Face value of the bond

- YTM: Years to maturity

Once you have these values, you can plug them into the following equation:

Adjusted Current Yield = [(Coupon ÷ Price) x Face Value] + [(Face Value - Price) ÷ YTM]

For example, imagine you are looking at a Treasury Note (T-Note) with the following specifications:

- Coupon: 5.5 percent

- Price: $950

- Face Value: $1,000

- YTM: 5 years

You would calculate the yield of that Treasury Note to be 10.06 percent.

Adjusted Current Yield = [(0.055 ÷ 995) x 1000] + [(1000 - 995) ÷ 5] = 10.06%

Zero-Coupon Bonds

To calculate the yield of a zero-coupon bond, like a Treasury Bill (T-Bill), you need to know the values of the following three things:

- Price: Purchase price of the bond

- Face Value: Face value of the bond

- DTM: Days to maturity

Once you have these values, you can plug them into the following equation:

Yield = [(Face Value - Price) ÷ Face Value] x (360 - DTM) x 100%

For example, imagine you are looking at a Treasury Bill (T-Bill) with the following specifications:

- Price: $975

- Face Value: $1,000

- DTM: 100 days

You would calculate the yield of that Treasury Bill to be 6.5 percent.

Yield = [(1,000 - 975) ÷ 1,000] x (360 - 100) x 100% = 6.5%