Convert a treasury bill discount price into its equivalent annual yield.
Bills are quoted on a discount basis against face value and a 360-day year, which understates the true return. The bond equivalent yield restates it against the price paid and a 365-day year so it can be compared with coupon bonds. The two conventions differ by a meaningful margin, so comparing a quoted bill discount with a bond yield directly gives the wrong answer.
Treasury Yield
Bond equivalent yield = (face − price) ÷ price × 365 ÷ days
Bond equivalent yield = (face − price) ÷ price × 365 ÷ days Bills are quoted on a discount basis against face value and a 360-day year, which understates the true return. The bond equivalent yield restates it against the price paid and a 365-day year so it can be compared with coupon bonds.
The two conventions differ by a meaningful margin, so comparing a quoted bill discount with a bond yield directly gives the wrong answer.
This calculator takes 3 inputs: Face value, Purchase price, Days to maturity. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.