INTRATE

INTRATE

Returns the interest rate for a fully invested security.

If this function is not available, run the Setup program to install the Analysis ToolPak. After you install the Analysis ToolPak, you must enable it by using the Add-Ins command on the Tools menu.

Syntax

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

Settlement   is 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   is the security's maturity date. The maturity date is the date when the security expires.

Investment   is the amount invested in the security.

Redemption   is the amount to be received at maturity.

Basis   is 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

  • 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, 1996, and is purchased by a buyer six months later. The issue date would be January 1, 1996, the settlement date would be July 1, 1996, and the maturity date would be January 1, 2026, which is 30 years after the January 1, 1996, issue date.
  • Settlement, maturity, and basis are truncated to integers.
  • If any argument is nonnumeric, INTRATE returns the #VALUE! error value.
  • If settlement or maturity is not a valid date, INTRATE returns the #NUM! 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 ³ maturity, INTRATE returns the #NUM! error value.
  • INTRATE is calculated as follows:

    Where:

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

    DIM = number of days from settlement to maturity.

Example

A bond has the following terms:

February 15, 1993, settlement date
May 15, 1993, maturity date
1,000,000 investment
1,014,420 redemption value
Actual/360 basis

The bond discount rate (in the 1900 date system) is:

INTRATE("2/15/93","5/15/93",1000000,1014420,2) equals 0.058328 or 5.8328 percent