# The Excel YIELD Function

Related Functions:
YIELDDISC
YIELDMAT

## Basic Description

The Excel YIELD function calculates the Yield of a security that pays periodic interest

The syntax of the function is :

YIELD( settlement, maturity, rate, pr, redemption, frequency, [basis] )

Where the arguments are as follows:

settlement-The settlement date of the security (ie. the date that the coupon is purchased)
maturity-The maturity date of the security (ie. 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
frequency-The number of coupon payments per year. This must be one of the following:
 1 - Annually 2 - Semi-Annually 4 - Quarterly
[basis]-

An optional integer argument which specifies the financial day count basis that is used by the security. Possible values are:

[basis]Day Count Basis
0 (or omitted)US (NASD) 30/360
1actual/actual
2actual/360
3actual/365
4European 30/360
The financial day count basis rules are explained in detail on the Wikipedia Day Count Convention page

Note that the settlement and maturity arguments should be supplied to the function as either:

• References to cells containing dates
or
• Dates returned from formulas

Warning:

 - If you attempt to input the settlement and maturity dates as text, these can be interpreted differently, depending on the date system and date interpretation settings on your computer. - Although you can input the dates as serial numbers, this is not recommended, as date serial numbering varies across different computer systems.

## Excel Yield Function Example

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:

AB
1Settlement Date:01-Jan-2010
2Maturity Date:30-Jun-2015
3=YIELD( B1, B2, 10%, 101, 100, 4 )

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 can be found on the Microsoft Office website.

## Yield Function Errors

If you get an error from the Yield function, this is likely to be one of the following:

Common Errors
#VALUE!-Occurs if either:
 - any of the supplied arguments are non-numeric or - the settlement or the maturity arguments are not a valid dates
#NUM!-Occurs if either:
 - the settlement date is ≥ maturity date or - Invalid numbers are supplied for the rate, pr, redemption, frequency or [basis] arguments(i.e. if either: rate < 0; pr ≤ 0; redemption ≤ 0; frequency is any number other than 1, 2 or 4; or [basis] is any number other than 0, 1, 2, 3 or 4)
#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 Yield function.