ACCRINT function is given in EXCEL for financial purpose. ACCRUED INTEREST means the interest which is accrued with time.It calculates the interest of those securities which give periodic returns.
PURPOSE OF ACCRINT IN EXCEL
ACCRINT FUNCTION CALCULATES THE ACCRUED INTEREST OF THE SECURITIES WHICH PAYS PERIODIC INTERESTS.
It means a bond kind of security paying out interest to us periodically say once a year, twice a year or four times a year i.e. quaterly.
PREREQUISITES TO LEARN ACCRINT
THERE ARE A FEW PREREQUISITES WHICH WILL ENABLE YOU TO UNDERSTAND THIS FUNCTION IN A BETTER WAY.
- Basic understanding of how to use a formula or function.
- Basic understanding of rows and columns in Excel.
- Of course, Excel software.
The syntax ( the way how formula is phrased for excel) of ACCRINT is
=ACCRINT(ISSUING DATE, FIRST INTEREST DATE ,SETTLEMENT DATE, COUPON RATE , PAR VALUE ,FREQUENCY OF PAYOUT, BASIS ,CALCULATION METHOD)
ISSUING DATE is the security’s issue date.
FIRST INTEREST DATE is the security’s first interest
SETTLEMENT DATE is the security’s settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.
ALL THREE DATES MUST BE ENTERED THROUGH THE DATE FUNCTION.
=DATE(YYYY,MM,DD) OTHERWISE ERROR WILL EMERGE.
COUPON RATE is the security’s annual coupon rate. Its just like INTEREST RATE.
PAR VALUE is the security’s par value. If we don’t use Par value,ACCRINT uses 1,000.
FREQUENCY OF PAYOUT is the number of coupon payments per year.
For annual payments, frequency = 1; for semiannual, frequency = 2; for quarterly, frequency = 4.
Basis is the type of day count basis to use.
|Basis||Day count basis|
|0 or omitted||US (NASD) 30/360|
BASIS VALUE CAN BE BETWEEN 0 TO 4 AS PER THE TABLE OTHERWISE ERROR WILL BE SHOWN.
CALCULATION METHOD It is 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. Default value is TRUE.
example:ACCRINT in excel
STEPS TO USE ACCRINT
THE DATA SAMPLE IS ALREADY GIVEN.
The data is put as per the picture from cell F7 TO F14
We put in the cell G15 the formula to get interest
We can put direct dates also and G14 can be put as TRUE OR FALSE as per need.
OTHER WAYS TO REACH THIS ARTICLE
WHAT IS EXCEL, HOW EXCEL WORKS, WRITE FORMULA IN EXCEL, ACCRINT FUNCTION IN EXCEL, HOW TO USE ACCRINT, ACCRUED INTEREST FUNCTION IN EXCEL.