How to use the ACCRINTM function
What is the ACCRINTM function?
The ACCRINTM function calculates the accrued interest for a security that pays interest at maturity. ACCRINTM stands for accrued interest at maturity.
What is a security?
A security that pays interest is a bond that investors use to loan money to a company or a government in exchange for interest payments. The interest rate is fixed and does not change over the life of the security.
What is accrued interest?
In finance, accrued interest is the interest on a bond that has accumulated since the last coupon payment.
What is the difference between the ACCRINT function and ACCRINTM function?
ACCRINT function calculates the accrued interest paid by the issuer periodically while the ACCRINTM calculates the interest that is paid at maturity.
For example, the arguments show the differences between these two functions:
ACCRINT(issue_date, first_interest, settlement, rate, par, frequency)
ACCRINTM(issue, settlement, rate, par, [basis])
What is the maturity date of a security?
The maturity date is the future date when the financial instrument expires or terminates. For bonds, it's when the principal investment is repaid to the investor.
For example, a 5-year bond issued today in 2023 will have a maturity date of 2028. That's when the original bond investment will be returned after the 5 years is up.
What is the security's issue date?
The issue date of a security is the date that the security was first issued or sold to investors. For bonds, the issue date is the date the bond was first offered and sold by the issuing entity. It establishes when the security's term or maturity period begins. The issue date starts the clock for calculating payments like interest or dividends.
What is the the security's settlement date?
The settlement date of a security is the date that the trade is finalized and the buyer must make payment to complete the transaction.
What is the security's annual coupon rate?
The annual coupon rate is the interest rate that a bond issuer pays annually to bondholders based on the face value of the bond. It is stated as a percentage of the bond's par value. The coupon rate is set when the bond is first issued and generally doesn't change.
What is the security's par value?
The par value, or face value, of a security is the nominal value or dollar amount assigned to the security by the issuer. Par value is the amount the bondholder receives back at maturity.
ACCRINTM Function Syntax
ACCRINTM(issue, settlement, rate, par, [basis])
Arguments
| issue | Required. The security's issue date. |
| settlement | Required. The security's settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer. |
| rate | Required. The security's annual coupon rate. |
| par | Required. The security's par value. Default value is $1,000. |
| [basis] | Optional. The type of day count basis to use. |
| Basis | Day count basis |
|---|---|
| 0 (default value) | US (NASD) 30/360 |
| 1 | Actual/actual |
| 2 | Actual/360 |
| 3 | Actual/365 |
| 4 | European 30/360 |
ACCRINTM Function example
Formula in cell C7:
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Functions in 'Financial' category
The ACCRINTM function function is one of many functions in the 'Financial' category.
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