MS Excel: financial functions

PDURATION stands for "Period Duration".It calculates the number of periods needed for an investment to grow from a starting value to an ending value, given a constant rate of return. In plain English:If you know your interest rate, your initial investment, and your target value, PDURATION tells you how long it will take to reach your goal.

ODDLYIELD stands for "Odd Last Period Yield". It calculates the annual yield of a bond when the last period before maturity is irregular — either shorter or longer than a normal coupon schedule. In simple words: If a bond’s last payment doesn't fit into a clean, regular schedule, ODDLYIELD helps you find the true return you will earn.

ODDLPRICE stands for "Odd Last Period Price".It calculates the price per $100 face value of a bond when the last period is irregular — that is, the final payment doesn’t align perfectly with a normal coupon schedule. In plain English:If a bond’s final interest payment happens earlier or later than expected, ODDLPRICE gives you the correct bond price.

ODDFYIELD stands for "Odd First Period Yield". It calculates the annual yield of a bond when the first period is shorter or longer than the standard schedule. In simple terms:If a bond doesn’t start on a "perfect" calendar (like paying every 6 months neatly), ODDFYIELD helps you figure out what your real return (yield) is. ✅ Regular bonds ➔ Use YIELD ✅ Bonds with odd first periods ➔ Use ODDFYIELD

ODDFPRICE stands for "Odd First Period Price". It calculates the price of a bond when the first period of the bond is shorter or longer than a regular period. In simple words: If a bond doesn’t start on a perfect schedule (like exactly every 6 months or 1 year), ODDFPRICE helps you figure out what it’s really worth today. ✅ Regular bonds ➔ Use PRICE ✅ Bonds with "weird" first periods ➔ Use ODDFPRICE Real-world bonds don't always fit neatly into textbook schedules!

NPV stands for Net Present Value. It is the single most powerful financial tool to measure the true value of future cash flows — brought back into today's money. NPV answers the question: "Is this investment, project, or business idea actually worth it?"

NPER stands for Number of Periods. The NPER function in Excel calculates how many payment periods are needed to pay off a loan or reach an investment goal, based on constant payments and a constant interest rate. In simple words: NPER tells you "how long will it take" to finish paying or saving.

The NOMINAL function in Excel helps you calculate the nominal annual interest rate when you know the effective interest rate and the number of compounding periods per year. Effective Rate = Actual rate you earn (includes compounding) Nominal Rate = Stated rate (ignores compounding) In simple terms: NOMINAL gives you the “advertised” annual interest rate based on how many times the interest is compounded.

MIRR stands for Modified Internal Rate of Return. It improves the traditional IRR by assuming reinvestment at a realistic rate (not at the IRR itself) and separately considering borrowing costs. MIRR gives a more accurate picture of an investment’s profitability.

The MDURATION function in Excel calculates the modified Macaulay duration of a security (such as a bond) that pays periodic interest. In simple words:MDURATION measures the price sensitivity of a bond to changes in interest rates, adjusting for how often the bond pays interest. It’s mainly used by investors, portfolio managers, and financial analysts to assess interest rate risk.

The ISPMT function in Excel calculates the interest paid during a specific period of an investment or loan with even principal payments (not even total payments like with IPMT). In simple words:ISPMT gives you the interest portion for a given period assuming you pay back the principal evenly across the loan term.

The IRR function in Excel calculates the Internal Rate of Return for a series of cash flows (payments and income).It is used heavily in finance and investment analysis to measure and compare the profitability of different projects or investments. In simple words:IRR tells you how profitable your investment is, shown as a percentage

The IPMT function in Excel calculates the interest payment for a given period of a loan or investment, based on constant periodic payments and a constant interest rate. In simple words: It tells you how much of your payment is just interest for a specific month or period.

The INTRATE function in Excel calculates the interest rate for a fully invested security between two dates. It is mainly used for short-term investments, such as Treasury bills, where the security does not pay periodic interest (zero-coupon bonds). In simple words: It finds the simple interest rate earned over a specific period.

The FVSCHEDULE function in Excel calculates the future value of an investment or loan after applying a series of interest rates over time. Unlike the standard FV function, which uses a constant interest rate, the FVSCHEDULE function allows for varying interest rates during different periods, making it ideal for complex financial models.

The FV (Future Value) function in Excel is one of the most widely used financial functions. It helps you calculate the future value of an investment or loan based on periodic, constant payments and a fixed interest rate. The function is crucial for financial planning, helping to determine how much an investment will grow over time or how much you will owe in the future.

The EFFECT function in Excel calculates the effective annual interest rate (EAR) or annual equivalent rate (AER) based on the nominal interest rate and the number of compounding periods per year.

The DURATION function in Excel calculates the Macaulay duration of a bond, which is the weighted average time until a bond's cash flows are received. It represents the bond’s interest rate sensitivity or how much the bond price will change with changes in interest rates.

The DISC function in Excel calculates the discounted price of a security based on the discount rate and face value. It’s commonly used in finance to determine the discount amount for securities such as Treasury bills or bonds that are sold at a discount. The DISC function is based on the discount yield and is primarily used to compute the discounted price of a financial instrument before its maturity date.

The DDB function in Excel calculates the depreciation of an asset for a specific period using the Double Declining Balance (DDB) method.This method is an accelerated depreciation technique, which means that an asset depreciates faster in the earlier periods compared to later periods. In simple terms, the DDB function helps you calculate how much of an asset's value has been depreciated using the double declining balance method, which takes a fixed percentage of the remaining