YIELDDISC Excel Formula

Author Zaheer    Category Formulas     Tags ,

Windows and Macintosh have so many programs that aid it users to finish their work easily and effectively. With all the programs that this two contains, the frequently used is the Microsoft Excel. Most people utilized this program because aside from documenting, this is also a great tool to easily compute mathematical equations. However, along with the computation, the user must learn and understand the functions associated with the program for them to efficiently use it. If you are using the program for computing some values in accounting, one of the functions that you need to be familiar with is the YIELDDISC function.

What is YIELDDISC Function?

YIELDDISC function is utilized to compute the yearly yield of a certain discounted security. With is function, the formula divides the difference of redemption and purchase price by the cost of the purchase. The answer is then change to yearly rate through the use of a given basis.

In order for the function to give correct results, you must place a value according to the syntax of the function. The formula of YIELDDISC function is:

=YIELDDISC(settlement, maturity, pr, redemption, basis)

To understand more the formula, below are its arguments:

  • settlement  – this is the security’s date of settlement. The date is when the security was purchased by the buyer.
  • Maturity – this is the date when the security will mature or when it will expire.
  • pr – refers to the cost of security per $100 face value.
  • redemption – this is the value of the security redemption per $100 face value
  • basis – refers to the kind of day count basis to be utilized during the process. Here, numbers 0 to 4 are used. 0 if the day count basis to use is the US method, which is 30/360. 1 is the day count basis is Actual/actual. 2 if the day count basis is Actial/360. Use 3 if the day count basis is Actual/365 and 4 if the day count basis is European method.

YIELDDISC Example

There was a bill that was purchased on August 18, 2011 that will mature on January 27, 201 having a discounted price of $97.50 and the redeemed value is at face value. By using Actual/365 as day count basis, determine the discounted yield.

From this problem, the given values are:

settlement – August 18, 2011

maturity – January 27, 2012

pr – $97.50

redemption – 100

basis – 3

Make the following procedures to solve the problem:

  • Place the given value on the cell of the Excel worksheet. Take note that every value must have one cell.
  • After all the given value was keyed in, click the cell to appear the answer.
  • From the cell, type in the YIELDDISC formula and follow the arguments.
  • Once all the value needed for the syntax are inputted, press the enter tab.
  • The answer will appear on the cell and it is 0.0578 or 5.78%

An important thing to keep in mind about this function is to make sure that the date of settlement and maturity is properly keyed in on the DATE function in order to avoid error and to obtain correct outcome.

1 Comment to “YIELDDISC Excel Formula”

  • sandy March 9, 2012 at 1:37 pm

    tnx..,it helps me a lot..

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