How to use YIELDDISC Function in Excel

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.

YIELDDISC Functio in Excel - How to use YIELDDISC Function in Excel

Syntax:  =YIELDDISC(B1,B2,B3,B4,B5)

Result: 5.62%

YIELDDISC Function in Excel - How to use YIELDDISC Function in Excel

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

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