MS Excel: financial functions

In some investment instruments, the entire interest payment is made at the maturity date, rather than in periodic coupon installments. These are often short-term notes or zero-coupon debt instruments with interest. Excel’s YIELDMAT function is designed to calculate the annual yield of such securities—helping investors accurately compare returns on different types of debt instruments.

In fixed-income investing, some securities—like Treasury bills (T-bills) and commercial paper—are sold at a discount and do not pay periodic interest. Instead, investors earn the difference between the purchase price and the face value at maturity. The YIELDDISC function in Excel calculates the annual yield on these discount (zero-coupon) securities, offering a straightforward way to evaluate their returns.

Understanding how much a bond truly earns over its lifetime is a fundamental part of fixed-income investing. The YIELD  function in Excel...

In finance, Net Present Value (NPV) helps determine the value of an investment by discounting future cash flows to their present value. However, standard NPV functions like NPV assume equally spaced cash flows, which isn't always realistic. Enter Excel’s XNPV function—designed to calculate the present value of cash flows that happen at irregular intervals, using actual calendar dates.

In real-world finance, investments and cash flows rarely happen on a fixed monthly or annual schedule. Payments and returns often occur at irregular intervals, making simple IRR calculations unreliable. This is where Excel’s XIRR function comes in—a powerful tool for computing the true annualized rate of return when cash flows do not occur at regular periods.

When managing assets in financial reporting, depreciation plays a critical role in recognizing the cost of using long-term assets over time. Excel offers multiple depreciation functions, and among them, the VDB function stands out for its flexibility and accuracy in handling partial periods and declining balance depreciation.

U.S. Treasury Bills (T-bills) are among the safest and most liquid short-term investments. Since they’re sold at a discount and mature at face value, investors don’t receive interest payments—they profit from the difference between the purchase price and redemption value. To understand the return on investment, Excel provides the TBILLYIELD function, which helps calculate the annualized yield of a T-bill based on its price.

When investing in Treasury Bills (T-bills), it's essential to understand how much to pay today for a future return. Since T-bills are zero-coupon securities sold at a discount, the price you pay is always less than their face value. Excel’s TBILLPRICE function helps investors and analysts quickly determine the current purchase price of a T-bill based on its discount rate and time to maturity.

In fixed-income investing, Treasury bills (T-bills) are one of the most common short-term government securities. They are zero-coupon instruments, sold at a discount and redeemed at face value. While the discount rate is traditionally used to quote yields on T-bills, it's not directly comparable to bond-equivalent yields used for other instruments. That's where Excel's TBILLEQ function becomes essential.

In asset accounting, depreciation methods significantly impact the timing of expense recognition. While the straight-line method spreads depreciation evenly, some organizations prefer to front-load depreciation, especially for assets that lose value faster in earlier years. Enter Excel’s SYD function—a built-in tool for calculating accelerated depreciation using the Sum-of-Years' Digits (SYD) method

In business and accounting, tracking how assets lose value over time is essential for accurate financial reporting, tax planning, and capital budgeting. One of the simplest and most widely used methods of calculating depreciation is the Straight-Line Method. Excel provides the SLN function to automate this calculation, making it easy to determine the annual depreciation expense for assets over their useful life.

In financial planning, business analysis, or investment modeling, it’s often important to answer a key question: Microsoft Excel's RRI function helps answer this by calculating the equivalent compound interest rate required to turn one amount into another over a specified number of periods. Whether you're projecting asset growth or evaluating ROI over time, RRI provides a simple and elegant solution.

In the world of fixed-income investing, discount instruments like Treasury bills and commercial paper are sold below face value and mature at full par. To calculate the maturity amount for such investments, Excel offers the RECEIVED function—a simple yet powerful tool for financial professionals, investors, and analysts. This article explains how to use the RECEIVED function, where it applies, and how it supports financial modeling for short-term investments.

The Excel RATE function answers that question by calculating the periodic interest rate for loans, annuities, or investments based on known payment terms. It's especially useful when other values (payment, term, future/present value) are known, but the rate is unknown. This article explains how to use RATE effectively—from simple loans to more advanced financial models.

The time value of money is one of the most fundamental principles in finance. Whether you're analyzing loans, investments, or capital projects, understanding how to calculate the present value of future cash flows is critical. Excel’s PV function is the go-to tool for this task. This article offers a professional deep dive into the PV function—explaining how to structure it, apply it in real-world scenarios, and avoid common mistakes.

In traditional bond structures, interest is paid periodically (e.g., semiannually). However, some bonds—such as short-term notes, certificates of deposit, or zero-coupon instruments with accrued interest—pay interest only at maturity. Excel’s PRICEMAT function is designed specifically to calculate the price per $100 face value of such instruments. This article walks through the PRICEMAT function, detailing its structure, use cases, and financial modeling insights.

In fixed-income analysis, not all securities pay periodic interest. Instruments like Treasury bills, commercial paper, and zero-coupon bonds are issued at a discount and redeemed at full face value. To determine their price based on a given discount rate, Excel provides the PRICEDISC function. This article explores the PRICEDISC function from a professional finance perspective, including its purpose, structure, usage examples, and best practices.

In financial analysis, especially when dealing with fixed-income securities, accurately calculating the price of a bond is essential. Excel’s PRICE function is a built-in tool designed for this purpose—it computes the price per $100 face value of a bond, given expected yield, maturity, and coupon rate. This article provides a detailed overview of t

If you're working with loans, mortgages, or installment plans, Excel’s PPMT function helps break down your payments and show how much of each one goes toward the principal—not just the total payment. Let's explore how it works step by step, from the basics to more advanced, real-world uses. The PPMT function calculates the principal portion of a loan payment for a given period, based on constant interest and fixed payments.

PMT stands for "Payment". It calculates the fixed payment required to completely pay off a loan or investment over time, based on constant payments and a constant interest rate. PMT tells you how much you need to pay each period (month, year, etc.) to pay off a loan or achieve an investment goal.