Title: Unlock an Extra $3,800 in Bond Yields Tagline: Unlock an Extra $3,800 in Bond Yields: How the Millers Maximized Their Fixed Income Problem: David and Sarah Miller, both 45, are high-earning professionals with a combined income of $450,000. They're aggressively saving for their three children's college education and have allocated $100,000 to fixed income investments, specifically focusing on discount bonds to diversify their portfolio. David came across a seemingly attractive discount bond offering a yield of 3.5% with 180 days to maturity, but Sarah is concerned about accurately comparing this to their existing bond portfolio, which primarily consists of bonds quoted using bond equivalent yield (BEY). They need a way to accurately compare the return of the discount bond to their existing holdings and determine if it's a worthwhile investment, especially considering their limited time horizon to accumulate college funds. Solution: By using the Bond Equivalent Yield Calculator, the Millers can quickly and accurately convert the discount bond's yield to a BEY. They input the discount yield (3.5%) and days to maturity (180). The calculator reveals the BEY to be approximately 3.69%. This allows them to directly compare the discount bond to other bonds quoted using BEY. Further, by cross-referencing the BEY with the Bond YTM calculator they can determine an approximate Yield-To-Maturity, providing further confidence in the instrument's overall value. ROI: By accurately comparing the discount bond's BEY (3.69%) to other investment options (e.g., existing bonds yielding 3.3%), the Millers can potentially increase their return by 0.39% on their $100,000 fixed income portfolio. This translates to an extra $390 in annual income. Over a 10-year period (assuming consistent investment), this amounts to an additional $3,900, significantly contributing to their college savings fund. By factoring in a slight interest rate increase on the principal, the increased return will generate approximately $3,800. Description: Confused by discount bond yields? Our Bond Equivalent Yield Calculator helps you compare them to standard bonds, ensuring you get the best return possible. Get the most out of your fixed income investments. Category: Lead Gen