The Excel YIELD function calculates the Yield of a security that pays periodic interest.
The syntax of the function is:
Where the arguments are as follows:
|settlement||-||The settlement date of the security (i.e. the date that the coupon is purchased).|
|maturity||-||The maturity date of the security (i.e. the date that the coupon expires).|
|rate||-||The security's annual coupon rate.|
|pr||-||The security's price per $100 face value.|
|redemption||-||The security's redemption value per $100 face value.|
Note that the settlement and maturity dates should be supplied to the Yield function as either:
Warning: If you attempt to enter text representations of dates into Excel functions, these can be interpreted differently, depending on the date system and date interpretation settings on your computer.
The following example shows the Excel Yield function used to calculate the yield on a coupon purchased on 01-Jan-2010, with Maturity date 30-Jun-2015 and a rate of 10%. The price per $100 face value is $101 and the redemption value is $100. Payments are made quarterly and the US (NASD) 30/360 day count basis is used:
|3||=YIELD( B1, B2, 10%, 101, 100, 4 )|
The above function calculates the yield to be 9.76%.
Note that, in the above example, the [basis] argument has been omitted, so the default US (NASD) 30/360 day method is used. Note also that, as recommended, the date arguments have been input as references to cells containing dates.
Further examples of the Excel Yield function are provided on the Microsoft Office website.
If you get an error from the Yield function, this is likely to be one of the following: