Example
In the example shown, we want to find the effective annual interest rate for a bond with a price of $895.00 and a redemption value of $1000. The settlement date is 6-Jul-2017 and the maturity date is 15-Jan-2020. There are no periodic interest payments, and the day count basis is US (NASD) 30/360. The formula in F5 is: With these inputs, the INTRATE function returns 4.65%, with percentage number format applied.
Entering dates
In Excel, dates are serial numbers. Generally, the best way to enter valid dates is to use cell references, as shown in the example. To enter valid dates directly inside a function, you can use the DATE function. To illustrate, the formula below has all values hardcoded, and the DATE function is used to supply each of the two required dates:
Basis
The basis argument controls how days are counted. The INTRATE function allows 5 options (0-4) and defaults to zero, which specifies US 30/360 basis. This article on wikipedia provides a detailed explanation of available conventions.
Notes
In Excel, dates are serial numbers. All dates, and basis, are truncated to integers. If dates are invalid (i.e. not actually dates) INTRATE returns #VALUE! INTRATE returns #NUM when: settlement >= maturity investment <= 0 or redemption <= 0 Basis is out-of-range
Dave Bruns
Hi - I’m Dave Bruns, and I run Exceljet with my wife, Lisa. Our goal is to help you work faster in Excel. We create short videos, and clear examples of formulas, functions, pivot tables, conditional formatting, and charts.
