INTRATE function

Description

Returns the interest rate for a fully invested security.

Syntax

INTRATE(settlement, maturity, investment, redemption, [basis])

The INTRATE function syntax has the following arguments:

• Settlement    Required. The security's settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.

• Maturity    Required. The security's maturity date. The maturity date is the date when the security expires.

• Investment    Required. The amount invested in the security.

• Redemption    Required. The amount to be received at maturity.

• Basis    Optional. The type of day count basis to use.

Remarks

• Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 39448 because it is 39,448 days after January 1, 1900.

• The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 30-year bond is issued on January 1, 2008, and is purchased by a buyer six months later. The issue date would be January 1, 2008, the settlement date would be July 1, 2008, and the maturity date would be January 1, 2038, which is 30 years after the January 1, 2008, issue date.

• Settlement, maturity, and basis are truncated to integers.

• If settlement or maturity is not a valid date, INTRATE returns the #VALUE! error value.

• If investment ≤ 0 or if redemption ≤ 0, INTRATE returns the #NUM! error value.

• If basis < 0 or if basis > 4, INTRATE returns the #NUM! error value.

• If settlement ≥ maturity, INTRATE returns the #NUM! error value.

• INTRATE is calculated as follows:

  

  where:

  • B = number of days in a year, depending on the year basis.

  • DIM = number of days from settlement to maturity.

Example

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, you can adjust the column widths to see all the data.