This article describes the formula syntax and usage of the YIELD function (function: A prewritten formula that takes a value or values, performs an operation, and returns a value or values. Use functions to simplify and shorten formulas on a worksheet, especially those that perform lengthy or complex calculations.) in Microsoft Excel.
Returns the yield on a security that pays periodic interest. Use YIELD to calculate bond yield.
YIELD(settlement, maturity, rate, pr, redemption, frequency, [basis])
Important Dates should be entered by using the DATE function, or as results of other formulas or functions. For example, use DATE(2008,5,23) for the 23rd day of May, 2008. Problems can occur if dates are entered as text.
The YIELD function syntax has the following arguments (argument: A value that provides information to an action, an event, a method, a property, a function, or a procedure.):
- Settlement Required. 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 Required. The security's maturity date. The maturity date is the date when the security expires.
- Rate Required. The security's annual coupon rate.
- Pr Required. The security's price per $100 face value.
- Redemption Required. The security's redemption value per $100 face value.
- Frequency Required. The number of coupon payments per year. For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4.
- Basis Optional. The type of day count basis to use.
||Day count basis
|0 or omitted
||US (NASD) 30/360
- 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, frequency, and basis are truncated to integers.
- If settlement or maturity is not a valid date, YIELD returns the #VALUE! error value.
- If rate < 0, YIELD returns the #NUM! error value.
- If pr ≤ 0 or if redemption ≤ 0, YIELD returns the #NUM! error value.
- If frequency is any number other than 1, 2, or 4, YIELD returns the #NUM! error value.
- If basis < 0 or if basis > 4, YIELD returns the #NUM! error value.
- If settlement ≥ maturity, YIELD returns the #NUM! error value.
- If there is one coupon period or less until redemption, YIELD is calculated as follows:
- A = number of days from the beginning of the coupon period to the settlement date (accrued days).
- DSR = number of days from the settlement date to the redemption date.
- E = number of days in the coupon period.
- If there is more than one coupon period until redemption, YIELD is calculated through a hundred iterations. The resolution uses the Newton method, based on the formula used for the function PRICE. The yield is changed until the estimated price given the yield is close to price.
The example may be easier to understand if you copy it to a blank worksheet.
How do I copy an example?
- Select the example in this article. If you are copying the example in Excel Online, copy and paste one cell at a time.
Important: Do not select the row or column headers.
Selecting an example from Help
- Press CTRL+C.
- Create a blank workbook or worksheet.
- In the worksheet, select cell A1, and press CTRL+V. If you are working in Excel Online, repeat copying and pasting for each cell in the example.
Important: For the example to work properly, you must paste it into cell A1 of the worksheet.
- To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.
After you copy the example to a blank worksheet, you can adapt it to suit your needs.
|February 15, 2008
|November 15, 2016
||Frequency is semiannual (see above)
||30/360 basis (see above)
||The yield, for the bond with the terms above (0.065 or 6.5%)
Note To view the result as a percentage, select the cell, and then on the Home tab, in the Number group, click the arrow next to Number Format, and click Percentage.