INTRATE function

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

Description

Returns the interest rate for a fully invested security.

Syntax

INTRATE(settlement, maturity, investment, redemption, [basis])

  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 INTRATE 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.

  • Investment    Required. The amount invested in the security.

  • Redemption    Required. The amount to be received at maturity.

  • 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, which is 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 date, INTRATE returns the #VALUE! error value.

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

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

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

  • INTRATE is calculated as follows:

    Equation

    where:

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

    • DIM = number of days from settlement to 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

2/15/2008

Settlement date

5/15/2008

Maturity date

$1,000,000

Investment

$1,014,420

Redemption value

2

Actual/360 basis

Formula

Description (Result)

Result

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

Discount rate, for the terms of the bond (0.05768 or 5.77%)

5.77%

Applies To: Excel 2010, Excel Starter, Excel 2013, Excel Online, Excel 2016 for Mac, Excel for Mac 2011, Excel 2007



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