How to Use the YIELDDISC Function in Excel

Below is a detailed guide on how the YIELDDISC function works in Microsoft Excel and Google Sheets.

Overview

The YIELDDISC function calculates the annual yield of a security that is sold at a discount to its face value, such as a Treasury bill. It returns the annual yield as a percentage.

Syntax

The syntax for the YIELDDISC function is consistent across both Excel and Google Sheets:

YIELDDISC(settlement, maturity, price, redemption, basis)
  • settlement: The date when the security is purchased (settlement date).
  • maturity: The date when the security matures (maturity date).
  • price: The purchase price of the security.
  • redemption: The value of the security at maturity (redemption value).
  • basis: The day count basis to be used in the calculation.

Examples

To illustrate how the YIELDDISC function works, consider the following example:

Settlement Date Maturity Date Price Redemption Value Basis
1/1/2022 12/31/2022 975 1000 0

To compute the yield of the security, use the following formula:

=YIELDDISC("1/1/2022", "12/31/2022", 975, 1000, 0)

This formula returns the annual yield based on the given data.

Use Cases

The YIELDDISC function is particularly valuable for financial analysts, investors, and anyone involved with fixed-income securities. It provides a precise calculation of the yield for securities sold at a discount, enabling more informed investment decisions.

Mastering the YIELDDISC function allows users to effectively analyze and evaluate the potential returns of different investment options.

More information: https://support.microsoft.com/en-us/office/yielddisc-function-a9dbdbae-7dae-46de-b995-615faffaaed7

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Returns the accrued interest for a security that pays interest at maturity
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Returns the number of days in the coupon period that contains the settlement date
Returns the number of days from the settlement date to the next coupon date
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Returns the previous coupon date before the settlement date
Returns the cumulative interest paid between two periods
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Returns the depreciation of an asset for a specified period by using the fixed-declining balance method
Returns the depreciation of an asset for a specified period by using the double-declining balance method or some other method that you specify
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Converts a dollar price, expressed as a decimal number, into a dollar price, expressed as a fraction
Returns the annual duration of a security with periodic interest payments
Returns the effective annual interest rate
Returns the future value of an investment
Returns the future value of an initial principal after applying a series of compound interest rates
Returns the interest rate for a fully invested security
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Returns the internal rate of return for a series of cash flows
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Returns the Macauley modified duration for a security with an assumed par value of $100
Returns the internal rate of return where positive and negative cash flows are financed at different rates
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Returns the net present value of an investment based on a series of periodic cash flows and a discount rate
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Returns the price per $100 face value of a security with an odd last period
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Returns the number of periods required by an investment to reach a specified value
Returns the periodic payment for an annuity
Returns the payment on the principal for an investment for a given period
Returns the price per $100 face value of a security that pays periodic interest
Returns the price per $100 face value of a discounted security
Returns the price per $100 face value of a security that pays interest at maturity
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Returns the net present value for a schedule of cash flows that is not necessarily periodic
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Returns the annual yield of a security that pays interest at maturity