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.