The ACCRINTM function in Google Sheets is a financial tool designed to calculate the accrued interest on a security that pays its interest at maturity. This function is particularly useful for investors and accountants who need to assess the interest income that has accumulated over time without receiving periodic interest payments.

Syntax

ACCRINTM(issue, maturity, rate, par, [basis])

• issue: The date the security is issued.
• maturity: The date the security matures.
• rate: The annual interest rate of the security.
• par: The face value of the security.
• basis: (Optional) The type of day count basis to be used. If omitted, it defaults to 0.

Example #1

=ACCRINTM("2023-01-01", "2025-01-01", 0.05, 1000)

This function calculates the accrued interest for a $1,000 bond issued on January 1, 2023, with a 5% interest rate, maturing on January 1, 2025. The result might be approximately $100.

Example #2

=ACCRINTM("2023-06-15", "2024-06-15", 0.03, 5000, 1)

This example computes the accrued interest for a $5,000 security issued on June 15, 2023, with a 3% interest rate, maturing on June 15, 2024, using the actual/actual day count method. The result could be around $75.

Example #3

=ACCRINTM("2023-09-01", "2026-09-01", 0.04, 2500, 2)

This function assesses the accrued interest for a $2,500 bond issued on September 1, 2023, with a 4% interest rate, maturing on September 1, 2026, employing a 30/360 day count scheme. The resulting interest may be close to $200.

Error handling

• NUM! This error occurs when the issue date is later than the maturity date, indicating that the bond cannot be issued in the future.
• VALUE! This error arises if the parameters provided are of the wrong type, such as if a date is incorrectly formatted or text is used instead of a number.
• DIV/0! This error signals that the rate is set to zero, making it impossible to calculate accrued interest as the interest income would be nonexistent.

Conclusion

The ACCRINTM function in Google Sheets serves as a valuable resource for financial analysis, enabling users to effectively determine accrued interest for fixed-income securities. Understanding its syntax and potential errors can enhance its application in financial modeling and investment assessment.