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Bank Discount Yield Formula

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Bank Discount Yield is a financial metric used to calculate the annualized yield of a short-term money market instrument. Check FAQs

BDY = (\frac{D}{FV}) \cdot (\frac{360}{DTM}) \cdot 100

BDY - Bank Discount Yield?D - Discount?FV - Face Value?DTM - Days to Maturity?

Bank Discount Yield Example

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Here is how the Bank Discount Yield equation looks like with Values.

Here is how the Bank Discount Yield equation looks like with Units.

Here is how the Bank Discount Yield equation looks like.

2.25 = (\frac{0.15}{800}) \cdot (\frac{360}{3}) \cdot 100

2.25 = (\frac{0.15}{800}) \cdot (\frac{360}{3}) \cdot 100

2.25 = (\frac{0.15}{800}) \cdot (\frac{360}{3}) \cdot 100

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Bank Discount Yield Solution

Follow our step by step solution on how to calculate Bank Discount Yield?

FIRST Step Consider the formula

BDY = (\frac{D}{FV}) \cdot (\frac{360}{DTM}) \cdot 100

Next Step Substitute values of Variables

∴

BDY = (\frac{0.15}{800}) \cdot (\frac{360}{3}) \cdot 100

Next Step Prepare to Evaluate

∴

BDY = (\frac{0.15}{800}) \cdot (\frac{360}{3}) \cdot 100

LAST Step Evaluate

∴

BDY = 2.25

Bank Discount Yield Formula Elements

Variables

Bank Discount Yield

Bank Discount Yield is a financial metric used to calculate the annualized yield of a short-term money market instrument.

Symbol: BDY

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Bank Discount Yield

Discount

Discount is the difference between the selling price and the price paid for the item.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Discount

Face Value

Face Value is the nominal value or dollar value of a security stated by the issuer.

Symbol: FV

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Face Value

Days to Maturity

Days to Maturity refers to the time period which indicates the duration or the term of the investment.

Symbol: DTM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Days to Maturity

Other formulas in Bond Yield category

Go Yield to Maturity

YTM = \frac{CP + (\frac{FV - Price}{Yrs})}{\frac{FV + Price}{2}}

Go Current Bond Yield

CBY = \frac{CP}{CBP}

Go Coupon Bond Valuation

CB = C A \cdot (\frac{1 - {(1 + YTM)}^{- n PYr}}{YTM}) + (\frac{P vm}{{(1 + YTM)}^{n PYr}})

Go Yield to Call for Callable Bond

YTC = (\frac{CP + \frac{C - CBP}{n y}}{\frac{C + CBP}{2}})

How to Evaluate Bank Discount Yield?

Bank Discount Yield evaluator uses Bank Discount Yield = (Discount/Face Value)*(360/Days to Maturity)*100 to evaluate the Bank Discount Yield, The Bank Discount Yield formula is defined as a measure which calculates the annualized rate of return on a short-term debt instrument, such as a Treasury bill or a commercial paper, based on its discount from face value. Bank Discount Yield is denoted by BDY symbol.

How to evaluate Bank Discount Yield using this online evaluator? To use this online evaluator for Bank Discount Yield, enter Discount (D), Face Value (FV) & Days to Maturity (DTM) and hit the calculate button.

FAQs on Bank Discount Yield

What is the formula to find Bank Discount Yield?

The formula of Bank Discount Yield is expressed as Bank Discount Yield = (Discount/Face Value)*(360/Days to Maturity)*100. Here is an example- 2.25 = (0.15/800)*(360/3)*100.

How to calculate Bank Discount Yield?

With Discount (D), Face Value (FV) & Days to Maturity (DTM) we can find Bank Discount Yield using the formula - Bank Discount Yield = (Discount/Face Value)*(360/Days to Maturity)*100.

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Bank Discount Yield Formula

Bank Discount Yield Example

Bank Discount Yield Solution

Bank Discount Yield Formula Elements

Other formulas in Bond Yield category

How to Evaluate Bank Discount Yield?

FAQs on Bank Discount Yield

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