DISC function

This article describes the formula syntax and usage of the DISC function in Microsoft Excel.

Description

Returns the discount rate for a security.

Syntax

DISC(settlement, maturity, pr, redemption, [basis])

Important   Dates should be entered by using the DATE function, or as results of other formulas or functions. For example, use DATE(2008,5,23) for the 23rd day of May, 2008. Problems can occur if dates are entered as text.

The DISC 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

Remarks

  • Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 39448 because it is 39,448 days after January 1, 1900.

  • The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 30-year bond is issued on January 1, 2008, and is purchased by a buyer six months later. The issue date would be January 1, 2008, the settlement date would be July 1, 2008, and the maturity date would be January 1, 2038, 30 years after the January 1, 2008, issue date.

  • Settlement, maturity, and basis are truncated to integers.

  • If settlement or maturity is not a valid serial date number, DISC returns the #VALUE! error value.

  • If pr ≤ 0 or if redemption ≤ 0, DISC returns the #NUM! error value.

  • If basis < 0 or if basis > 4, DISC returns the #NUM! error value.

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

  • DISC is calculated as follows:

    Equation

    where:

    • B = number of days in a year, depending on the year basis.

    • DSM = number of days between settlement and maturity.

Example

Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, you can adjust the column widths to see all the data.

Data

Description

39107

Settlement date

39248

Maturity date

97.975

Price

100

Redemption value

1

Actual/actual basis (see above)

Formula

Description

Result

=DISC(A2,A3,A4,A5,A6)

The bond discount rate, for a bond with the above terms

0.0524202

Applies To: Excel 2013, Excel 2007, Excel 2010, Excel Starter, Excel Online, Excel 2016 for Mac



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