The effective yield is the interest rate that equates the present value of the bond's payment stream with the bond's market price. The figure shows the present value of the payment stream as a function of the interest rate.The effective yield can thus be found by drawing a horizontal line at the level of the bond's price. The effective yield is the interest rate that equates the present value of the bond's payment stream with the bond's market price. The figure shows the present value of the payment stream as a function of the interest rate. The effective yield can thus be found by drawing a horizontal line at the level of the bond's price