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

The INTRATE function calculates the interest rate for a fully invested security. The function arguments are:

settlement

is the settlement date of the security, expressed as a date code

maturity

is the maturity date of the security, expressed as a date code

investment

is the amount invested in the security

redemption

is the amount received at maturity

basis

is the type of day count basis used, where basis is one of the following:

Basis

Day count basis

0

US 30/360

1

Actual/actual

2

Actual/360

3

Actual/365

4 or omitted

European 30/360

INTRATE is calculated using the formula:

[(redemption - investment)/investment] * B/DIM

where B is the number of days in a year according to the basis used and DIM is the number of days from settlement to maturity.

For example, you have been issued with a bond that comes to maturity on August 31st 1998, the settlement date is July 15th 1997, the amount invested in the security is $10,000, the redemption value is $10,100, and the day count basis is actual/actual. Using the formula

INTRATE(35625, 36037, 10000, 10450, 1)

returns an interest rate of 3.98665% for a fully invested security.

See also:

Other financial functions