The TBILLEQ function in Google Sheets is a powerful tool for financial analysts and investors looking to calculate the equivalent annualized rate of return on a U.S. Treasury Bill. This function is particularly useful for determining returns on short-term investments, as it gives a standardized way to assess performance based on discount rates, providing clarity and facilitating informed decision-making.

Syntax

TBILLEQ(settlement, maturity, discount)

• settlement: The date when the Treasury Bill is purchased.
• maturity: The date when the Treasury Bill matures.
• discount: The discount rate of the Treasury Bill as a decimal.

Example #1

=TBILLEQ("2023-01-01", "2024-01-01", 0.02)

This function calculates the annualized equivalent return for a Treasury Bill purchased on January 1, 2023, with a maturity date of January 1, 2024, and a discount rate of 2%. The result will indicate the expected return over one year based on the given discount rate. Example result: Approximately 0.0204 or 2.04%.

Example #2

=TBILLEQ("2023-06-01", "2023-12-01", 0.015)

This example assesses a Treasury Bill acquired on June 1, 2023, maturing on December 1, 2023, with a discount rate of 1.5%. The function will yield the annualized return based on the 6-month investment period. Example result: Approximately 0.0300 or 3.00%.

Example #3

=TBILLEQ("2023-03-15", "2023-09-15", 0.005)

In this case, the function evaluates a Treasury Bill bought on March 15, 2023, maturing on September 15, 2023, with a discount rate of 0.5%. This helps investors understand their expected earnings over a 6-month period. Example result: Approximately 0.0100 or 1.00%.

Error handling

• VALUE!: Indicates that one of the parameters is not in the correct format, such as an invalid date.
• NUM!: This error occurs if the discount rate is out of acceptable bounds, or if there are issues with the dates, such as the settlement date being after the maturity date.
• REF!: Occurs when a referenced cell or value is invalid or not found in the sheet.

Conclusion

The TBILLEQ function is an essential tool for investors dealing with U.S. Treasury Bills, offering a straightforward method to evaluate the annualized rate of return. By understanding how to utilize this function effectively, users can enhance their investment strategies and gain insights into the profitability of their Treasury Bill transactions.