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Excel YIELDDISC function

Author: Siluvia Last Modified: 2024-10-08

The YIELDDISC function returns the annual yield for a discounted security.

showing the usage of YIELDDISC function

Syntax

YIELDDISC(settlement, maturity, pr, redemption, [basis])

Arguments

  • Settlement (required): The settlement date of the security. It is the date after the issue date when the security is purchased;
  • Maturity (required): The maturity date of the security. It is the date on which the security expires;
  • Pr (required): The security’s price per $100 face value;
  • Redemption (required): The security’s redemption value per $100 face value;
  • Basis (optional): An integer number (0, 1, 2, 3 or 4) specifying the day basis to be used. Default is 0.
 Basis  Date System 
 o or omitted  US (NASD) 30/360
 1  Actual/actual
 2  Actual/360
 3  Actual/365
 4  European 30/360

Remarks

1. In Excel, dates can be used in calculations as they are stored as sequential numbers. By default, 1/1/1900 is serial number 1, so 12/1/2021 is serial number 40877 because it is 40876 days after 1/1/1900;
2. Dates provided for “settlement” and “maturity” should be entered:
-- As references to cells containing dates;
-- By using the DATE function;
-- As results returned from other formulas.
3. If settlement, maturity, frequency, and basis contain decimal, they will be truncated to integers;
4. The #NUM! error occurs when either of the following conditions is met:
-- The settlement date is greater than or equal to the maturity date;
-- Any of the supplied arguments “rate”, “pr”, “redemption”, “frequency” or “basis” is an invalid number.
Such as: "rate" < 0; "pr" ≤ 0; "redemption" ≤ 0; "frequency" is not equal to 1, 2 or 4; or [basis] is any number other than 0, 1, 2, 3 or 4.
5. The #VALUE! error occurs when either of the following conditions is met:
-- “Settlement” and “maturity” dates are invalid;
-- Any of the supplied arguments are non-numeric.

Return Value

It returns a numeric value.

Example

As shown in the screenshot below, a security is purchased on January 15, 2021 for $98.00 per $100 face value, and it will expire on December 1, 2021. The security’s redemption value is $100. To calculate the annual yield for this discounted security using the actual/actual day count basis (basis=1), you can do as follows.

showing the usage of YIELDDISC function

1. Select a blank cell (here I select F5), enter the following formula and press Enter to get the result.

=YIELDDISC(C5,C6,C7,C8,C9)

showing the usage of YIELDDISC function

2. Then change the cell format to percentage according to your needs.

Related Functions

Excel YIELD function
The YIELD function returns the annual yield for a discounted security.

Excel YIELDMAT function
The YIELDMAT function returns the annual yield of a security that pays interest at maturity.

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