The Excel YIELDDISC function returns the annual yield for a discounted security, such as a Treasury bill, that is issued at a discount but that matures at face value.
Syntax:= YIELDDISC (sd, md, pr, redemption, [basis])
The YIELDDISC 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.
- Pr Required. The security’s price per $100 face value.
- Redemption Required. The security’s redemption value per $100 face value.
- Basis Optional. The type of day count basis to use.
| Basis | Day count basis |
|---|---|
| 0 or omitted | US (NASD) 30/360 |
| 1 | Actual/actual |
| 2 | Actual/360 |
| 3 | Actual/365 |
| 4 | European 30/360 |
Example: Let’s look at some Excel YIELDDISC function examples and explore how to use the YIELDDISC function as a worksheet function in Microsoft Excel:
In the following spreadsheet, the Excel Yielddisc function is used to calculate the annual yield for a discounted security that has the settlement date 01-Mar-2020 and the maturity date 01-Jun-2020. The price per $100 face value is $98.585 and the redemption value is $100.
Syntax: =YIELDDISC(B1,B2,B3,B4,B5)
Result: 5.62%
Note:
- Settlement, maturity, and basis are truncated to integers.
- If settlement or maturity is not a valid date, YIELDDISC returns the #VALUE! error value.
- If pr ≤ 0 or if redemption ≤ 0, YIELDDISC returns the #NUM! error value.
- If basis < 0 or if basis > 4, YIELDDISC returns the #NUM! error value.
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If settlement ≥ maturity, YIELDDISC returns the #NUM! error value.
