What is YIELDMAT function in Excel?
YIELDMAT function is one of the Financial functions in Microsoft Excel that returns the annual yield of a security that pays interest at maturity.
Syntax of YIELDMAT function
YIELDMAT(settlement, maturity, issue, rate, pr, [basis])
The YIELDMAT 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.
- Issue: The security’s issue date, expressed as a serial date number.
- Rate: The security’s interest rate at date of issue.
- Pr: The security’s price per $100 face value.
- Basis(Optional): The type of day count basis to use.
|Basis||Day count basis|
|0 or omitted||US (NASD) 30/360|
YIELDMAT 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, issue, and basis are truncated to integers.
- If settlement, maturity, or issue is not a valid date, YIELDMAT returns the #VALUE! error value.
- If rate < 0 or if pr ≤ 0, YIELDMAT returns the #NUM! error value.
- If basis < 0 or if basis > 4, YIELDMAT returns the #NUM! error value.
- If settlement ≥ maturity, YIELDMAT returns the #NUM! error value.
Example of YIELDMAT 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.
|6.25%||Percent semiannual coupon|
|0||30/360 basis (see above)|
|=YIELDMAT(A2,A3,A4,A5,A6,A7)||The yield, for the bond with the terms above (0.060954 or 6.10%)||6.10%|