The Excel DISC function calculates the Discount Rate for a bond.
The format of the function is:
|settlement||-||The security's settlement date (ie. the date that the coupon is purchased)|
|maturity||-||The security's maturity date (ie. the date that the coupon expires)|
|pr||-||The security's price per $100 face value.|
|redemption||-||The security's redemption value per $100 face value|
|[basis]||-||An optional argument which defines the day count basis to be used in the calculation.|
Possible values of Basis and their meanings are :
Note that the settlement and maturity dates should be input as either:
- If you attempt to input these date arguments as text, Excel may misinterpret them, due to different date systems, or date interpretation settings.
Warning: Although you can input the date arguments as date serial numbers, this is not recommended as date serial numbering does vary across different computer systems.
In the following example, the Excel Disc function is used to calculate the discount rate of a coupon purchased on 01-Apr-2010, with Maturity date 31-Mar-2015. The price per $100 face value is $95, the Redemption value is $100, and the US (NASD) 30/360 day count basis is used :
|3||=DISC( B1, B2, 95, 100 )|
The functions calculates the Discounted Rate to be 1.0%
Note that, as the default US (NASD) 30/360 day method is used in the above example, the basis argument can be omitted.
Further examples of the Excel Disc function can be found on the Microsoft Office website.
If your Disc function gives you an error message, use the table below to look up the likely cause:
|#VALUE!||-||Occurs if the supplied settlement or maturity arguments are not valid dates|