COUPDAYS Excel Formula

Microsoft Excel is widely used by banks and mortgage companies. This program aids them to easily compute reports and data of various financial matters. Moreover, Excel is one of the reliable databases when it comes in storing and administering their data. With regards to financial computation, users should be familiar with the different functions of Excel program to easily utilize it for any financial calculation work. One of the needed functions for some task is the COUPDAYS function. If you’re not that too familiar about this function, this article could aid you to easily understand the function.

Importance of COUPDAYS Function

The function is used to return the value of day within a certain time that contains date of settlement. With this function, user must note on the date to enter as arguments. It needs to be put in through Excel DATE function. For instance, the Date is May 27, 1984 then it needs to be entered in the function as =DATE(1984,5,27).

Aside from this, correct formula should be entered in Excel to give the right and correct answer. The COUPDAYS formula is:

=COUPDAYS(settlement_date, maturity, frequency, [basis])

The arguments on the formula are:

  • settlement_date – this must be the date of when the coupon was purchased
  • maturity – this is the expiration date of the coupon
  • frequency – this is the figure for payments that the buyer needs to pay every year. Once the frequency is equal to 1 then the buyer must pay 1 coupon fee every year, if it is equal to 2 then 2 coupon fees each year and so forth.
  • basis – this is not an obligatory argument. This tells the basis of day count to be utilized in the computation. This determines how the interest grows over time.

Basis could have the following value:

  • Once it is zero or no value the day count basis is equal to US(NASD) 30/60
  • If it’s 1 then the day count basis is actual/actual
  • If the basis is 2 then the day count basis is equal to actual/360
  • If it’s 3, the day count basis is equal to actual/365
  • And then for 4, the day count basis is European 30/360

Since maturity and settlement arguments deals with date, so they can be keyed in as references to cells that contain dates or date numbers from formulas. Once the dates are keyed in with the use of the function through a text format, there is a huge possibility that it could be misinterpreted, because of the diverse date systems, or interpretation of date settings in the computer.

How to Use COUPDAYS Function

Key in the following into the cells of Microsoft Excel worksheet:

A1 – =DATE(2011, 9,21) – settlement date

A2 – =DATE(2012, 8, 20) – maturity

4 – frequency

1 – basis

From given figures, here’s how you can solve its COUPDAYS:

  • Click the cell where you can locate the answer.
  • In that cell, type in “=COUPDAYS(“
  • Then click the reference cell for the settlement, type in comma, click the reference cell for the maturity, type in comma, click the reference cell for frequency, type in comma again, click the reference cell for basis and type in closing parenthesis.
  • After the closing parenthesis press the enter key.
  • The answer will automatically appear and it is equal to 92. The value is the revised figure of days in the beginning period of the coupon and date of settlement.

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