How do I use the ACCRINT function in Excel to calculate accrued interest for a financial instrument?

Description

Returns the accrued interest for a security that pays periodic interest.

Syntax

ACCRINT(issue, first_interest, settlement, rate, par, frequency, [basis], [calc_method])

The ACCRINT function syntax has the following arguments:

• Issue    Required. The security’s issue date.

• First_interest    Required. The security’s first interest date.

• 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.

• Rate    Required. The security’s annual coupon rate.

• Par    Required. The security’s par value. If you omit par, ACCRINT uses $1,000.

• 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.

• Calc_method    Optional. A logical value that specifies the way to calculate the total accrued interest when the date of settlement is later than the date of first_interest. A value of TRUE (1) returns the total accrued interest from issue to settlement. A value of FALSE (0) returns the accrued interest from first_interest to settlement. If you do not enter the argument, it defaults to TRUE.

Remarks

• 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.

• Issue, first_interest, settlement, frequency, and basis are truncated to integers.

• If issue, first_interest, or settlement is not a valid date, ACCRINT returns the #VALUE! error value.

• If rate ≤ 0 or if par ≤ 0, ACCRINT returns the #NUM! error value.

• If frequency is any number other than 1, 2, or 4, ACCRINT returns the #NUM! error value.

• If basis < 0 or if basis > 4, ACCRINT returns the #NUM! error value.

• If issue ≥ settlement, ACCRINT returns the #NUM! error value.

• ACCRINT is calculated as follows:

  

  where:

  • Ai = number of accrued days for the ith quasi-coupon period within odd period.

  • NC = number of quasi-coupon periods that fit in odd period. If this number contains a fraction, raise it to the next whole number.

  • NLi = normal length in days of the quasi-coupon period within odd period.