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INTRATE function: Description, Usage, Syntax, Examples and Explanation

What is INTRATE function in Excel?

INTRATE function is one of the Financial functions in Microsoft Excel that returns the interest rate for a fully invested security.

Syntax of INTRATE function

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

The INTRATE function syntax has the following arguments:

  • Settlement: The security’s settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.
  • Maturity:  The security’s maturity date. The maturity date is the date when the security expires.
  • Investment: The amount invested in the security.
  • Redemption: The amount to be received at maturity.
  • Basis (Optional) The type of day count basis to use.

Note: Problems can occur if dates are entered as text. Therefore, all dates should be entered by using the DATE function, or formatted as date under format cell to avoid errors.

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

INTRATE formula explanation

  • Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By default, January 1, 1900 is serial number 1, and January 1, 2008 is serial number 39448 because it is 39,448 days after January 1, 1900.
  • The settlement date is the date a buyer purchases a coupon, such as a bond. The maturity date is the date when a coupon expires. For example, suppose a 30-year bond is issued on January 1, 2008, and is purchased by a buyer six months later. The issue date would be January 1, 2008, the settlement date would be July 1, 2008, and the maturity date would be January 1, 2038, which is 30 years after the January 1, 2008, issue date.
  • Settlement, maturity, and basis are truncated to integers.
  • If settlement or maturity is not a valid date, INTRATE returns the #VALUE! error value.
  • If investment ≤ 0 or if redemption ≤ 0, INTRATE returns the #NUM! error value.
  • If basis < 0 or if basis > 4, INTRATE returns the #NUM! error value.
  • If settlement ≥ maturity, INTRATE returns the #NUM! error value.
  • INTRATE is calculated as follows:Equation

    where:

    • B = number of days in a year, depending on the year basis.
    • DIM = number of days from settlement to maturity.

Example of INTRATE function

Steps to follow:

1. Open a new Excel worksheet.

2. Copy data in the following table below and paste it in cell A1

Note: For formulas to show results, select them, press F2 key on your keyboard and then press Enter.

You can adjust the column widths to see all the data, if need be.

Data Description
2/15/2008 Settlement date
5/15/2008 Maturity date
$1,000,000 Investment
$1,014,420 Redemption value
2 Actual/360 basis
Formula Description (Result) Result
=INTRATE(A2,A3,A4,A5,A6) Discount rate, for the terms of the bond (0.05768 or 5.77%) 5.77%

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