The YIELDDISC function in Google Sheets is a powerful tool for calculating the annual yield of a discount (non-interest-bearing) security. This function is essential for investors and financial analysts who need to evaluate the returns on securities that do not pay periodic interest, typically sold at a discount from their face value.

Syntax

YIELDDISC(settlement, maturity, price, redemption)

• settlement: The date when the security is purchased.
• maturity: The date when the security expires or matures.
• price: The price at which the security is currently selling.
• redemption: The security’s face or par value upon maturity.

Example #1

=YIELDDISC("2023-01-01", "2025-01-01", 950, 1000)

This call calculates the annual yield for a discount security purchased on January 1, 2023, maturing on January 1, 2025, purchased at a price of 950 with a redemption value of 1000. The result would be approximately 2.63%.

Example #2

=YIELDDISC("2023-06-01", "2024-06-01", 980, 1000)

This function evaluates a discount security bought on June 1, 2023, maturing on June 1, 2024, at a price of 980. The redemption value is 1000. The calculated yield would be close to 2.04%.

Example #3

=YIELDDISC("2023-03-15", "2026-03-15", 900, 1000)

This example determines the yield for a discount security acquired on March 15, 2023, that matures on March 15, 2026, bought at a price of 900. The redemption amount of 1000 results in an estimated yield of approximately 3.70%.

Error handling

• VALUE! – This error occurs if any of the parameters are of the wrong data type, like using text instead of dates or numbers.
• NUM! – This indicates that an invalid number was provided, such as a negative price or redemption value that’s less than the purchase price.
• REF! – This error signifies a reference issue, often when the specified settlement or maturity dates are incorrect or cannot be located.

Conclusion

The YIELDDISC function is a vital component for analyzing discount securities in Google Sheets. By understanding its syntax and parameters, users can effectively evaluate the yield on these financial instruments, aiding in better investment decisions. Utilizing this function can streamline financial calculations and provide clearer insights into the value of discount securities.