# DISC Excel Formula

The person who wants to calculate the Discount Rate, as for example for a bond, then the DISC function can provide him the necessary formula to find out the rate. If the DISC function does not available in your Excel software, then the add-in (Analysis ToolPak) should be installed and loaded first. To know more about the installation process, you should follow the following steps – from the tools menu click on the Add-Ins; then choose the Analysis ToolPak from the available list, then click ok. For more instructions, you should follow the instructions available in setup program. If still you face problems, then you should contact to the Microsoft site. You will have to go through complex calculations to find out the discount rate manually, but this Excel function DISC can relieve you from such tasks.

**The DISC functions syntax is as follows – “DISC** (settlement,maturity,pr,redemption,basis)”. In this function, settlement denotes the date of the security settlement; maturity denotes maturity date of the security, this is the security’s expire date; pr denotes the price of the security per hundred dollar face value; redemption denotes the redemption value of the security per hundred dollar face value; and basis denotes the day count type. If the basis is omitted or zero, then the count basis will be US (NASD) 30/360; if it is 1, then the count basis will be Actual/actual; if it is 2, then the count basis will be Actual/360; if it is 3, then the count basis will be Actual/365; if it is 4, then the count basis will be European 30/360.

For the DISC function, some remarks are mentioned here. Dates are stored as sequential numbers in the Microsoft Excel; this is done to use them in calculations. 1 January 1990 is denoted as serial number 1, following this 1 January 2008 is the serial number 39448. If the system is Macintosh, then a different system is used as default. Basis, maturity, and settlement are shaped to integers. In case of an invalid serial date number in the maturity or settlement, DISC function will return the value #VALUE! error. The function will return an error value if the redemption ? 0 or pr ? 0. The function will return an error value if the basis > 4 or basis < 0. The function will also return an error value if maturity ? settlement.

To understand the dates an example can help you. Suppose that on the 1^{st} January of 2008 a bond (30-year) is issued. A buyer purchased it six months later. Here, the issue date is the 1^{st} January 2008; the settlement date is the 1^{st} July 2008, and the maturity date is the 1^{st} January 2038. Before using this DISC function in a database the user or the administrator should be sure about all the terms used in the function. There are descriptions about the functions in the help file of the Excel program. To know more about the DISC function you can visit the help files.

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