The Excel INTRATE Function

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Related Function:

DISC Function

Basic Description

The Excel INTRATE function calculates the interest rate for a fully invested security.

The format of the function is :

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

where the arguments are as shown in the table below:

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)

investment

The initial amount invested into the security

redemption

The amount to be received at maturity

[basis]

An optional argument which defines the day count basis to be used in the calculation.
Possible values of the [basis] argument, and their meanings are :

[basis]	Day Count Basis
0 (or omitted)	US (NASD) 30/360
1	actual/actual
2	actual/360
3	actual/365
4	European 30/360

The financial day count basis rules are explained further on the Wikipedia Day Count Convention page

Note that the settlement and maturity dates should be input as either:

References to cells containing dates

Dates returned from formulas

- 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.

Intrate Function Example

In the spreadsheet below, the Excel Intrate function is used to calculate the interest rate of an investment of $1,000, which was used to purchase a security on 01-Apr-2005. The security matured on 1-Mar-2010, with a redemption value of $2,125 and the US (NASD) 30/360 day count basis is used:

Examples of use of the Excel Intrate Function

The formula in the above spreadsheet returns the interest rate 22.5%.

Note that, in this example, the [basis] argument is omitted and so takes on the default of 0 (and therefore uses the US (NASD) 30/360 basis)

Note also that, as recommended by Microsoft, the dates are not typed directly into the function. Instead, in this example, the Excel Date function has been used.

Further examples of the Excel Intrate function can be found on the Microsoft Office website.

Trouble Shooting

If you get an error from the Excel Intrate Function, this is likely to be one of the following :

Common Errors

#NUM!

Occurs if either:

-	either of the supplied investment or redemption arguments are ≤ 0
-	the basis argument is supplied and is not equal to 0, 1, 2, 3 or 4
-	the supplied maturity date is ≤ the supplied settlement date

#VALUE!

Occurs if either of the supplied settlement or maturity arguments are not valid dates or any of the other arguments are not recognised as numeric values

#NAME?

Occurs when Analysis ToolPak add-in is not enabled in your Excel.
You will need to enable the add-in if you want to use the Excel Intrate function.

To do this in Excel 2003 :

From the Tools drop-down menu, select the option Add-Ins ...
An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak and click OK

To do this in Excel 2007 :

Click the Microsoft button on the top left of your spreadsheet and select the Excel Options button
From the menu on the left hand side, select Add-Ins
In the 'Manage:' box, select Excel Add-ins and click Go...
An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak and click OK

To do this in Excel 2010 :

Click the File tab (top left of your spreadsheet) and select Options
From the menu on the left hand side, select Add-Ins
If the window that pops up doesn't show the 'Add-ins' list, use the 'Manage:' drop-down menu (at the bottom of the window) to select Excel Add-ins. Click Go...
From the 'Add-Ins' window, select the option Analysis ToolPak and click OK

Also, the following formatting problem is encountered by some users:

Common Formatting Problem

If the result of your Intrate function is presented as a decimal, or shows 0%, this is likely to be due to the formatting of the cell containing the function.

This can therefore be fixed by formatting the cell as a percentage, with decimal places :

Use the mouse to right click on the cell containing the function
Select the Format Cells ... option and ensure the Number tab is selected
Under the Category heading, make sure the option Percentage is selected, and in the box to the right (entitled Decimal Places), select the number of decimal places to be displayed.
Click OK