The Excel YIELDMAT function calculates the annual yield of a security that pays interest at maturity.
The syntax of the function is :
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)|
|issue||-||The issue date of the security|
|rate||-||The security's interest rate at date of issue|
|pr||-||The security's price per $100 face value|
|[basis]||-||An optional integer argument which specifies the financial day count basis that is used by the security. Possible values are:|
The financial day count basis rules are explained in detail on the Wikipedia Day Count Convention page
The date arguments must satisfy the following:
Note also, that the settlement, maturity and issue date arguments should be supplied to the function as either:
In the following spreadsheet, the Excel Yieldmat function is used to calculate the annual yield for a security purchased on 01-Jan-2011, with issue date 01-Jul-2008 and maturity date 30-Jun-2012. The interest rate at date of issue is 5.5% and the security has a price of $101 per $100 face value. The US (NASD) 30/360 day count basis is used:
|4||=YIELDMAT( B1, B2, B3, 5.5%, 101 )|
This calculates the yield to be 4.21%.
Note that, in the above example:
Further examples of the Excel Yieldmat function can be found on the Microsoft Office website.
If you get an error from the Yieldmat function, this is likely to be one of the following:
Occurs when Analysis ToolPak add-in is not enabled in your Excel.