Have you ever wanted to unlock the full potential of financial functions in Google Sheets, even if you’re not a financial analyst? Well, the key to achieving this lies in understanding essential financial terms, such as the DISC function in Google Sheets. In this article, we will dive deep into the world of finance and unravel the secrets of harnessing the DISC function.
DISC Function in Google Sheets – Syntax and Arguments
To start our journey, let’s first explore the syntax and arguments of the DISC function in Google Sheets.
Syntax
The syntax for the DISC function in Google Sheets is as follows:
DISC(settlement, maturity, price, redemption, [day_count_convention])Arguments
As you can see, the DISC function requires four mandatory arguments and one optional argument. Let’s break down each argument:
- Settlement: This refers to the settlement date of the security, which is the date when the security is delivered or traded to the buyer after issuance.
- Maturity: This represents the maturity or expiry date of the security.
- Price: The price at which the security is bought.
- Redemption: The redemption value of the security.
- Day Count Convention (Optional): Ranging from 0 to 4, this argument determines the type of day count basis to use. The default value is set to 0.
Now that we have a firm grasp on the syntax and arguments, let’s move on to the exciting part: calculating the discount rate of a bond!
Google Sheets Formula to Calculate the Discount Rate of a Bond
Calculating the discount rate of a bond in Google Sheets is a breeze. Simply input the following values into the DISC function:
To specify the arguments as values within the formula, you can use the following DISC formula:
Recommended:
=disc(date(2019,1,20),date(2020,6,15),964.87,1000,1) Not Recommended:
=disc("20/01/2019","15/06/2020",964.87,1000,1) It’s important to note that using dates in text format may cause errors, depending on the regional/locale settings of your sheet. Therefore, it is recommended to input the dates as values.
How to Format the DISC Function Output to Percentage in Google Sheets?
After performing the discount rate calculation, you will obtain a number as the output in cell C7. To convert this number to a percentage, you have two options:
- Select the cell (C7) containing the formula, go to the Format menu, select Number, and click on Percent.
- Alternatively, you can wrap the DISC formula with the To_Percent function as follows:
=to_percent(disc(C2,C3,C4,C5,C6))By utilizing either of these methods, you can easily convert the discount rate to a more readable percentage format.
Errors in the DISC Function Output in Google Sheets
While working with the DISC function in Google Sheets, you may encounter two possible error types: 3 and 6. The corresponding error values are #VALUE! and #NUM!.
To identify the type of error, you can use the ERROR.TYPE function. Here are some common reasons for these errors:
- The formula returns a
#VALUE!error when invalid dates or dates in the wrong format are used. #NUM!errors can occur if the settlement date is not less than the maturity date, if the day_count_convention argument has an invalid value, or if the price/redemption is blank or less than or equal to 0.
If you come across any errors, hover your mouse over them and read the tooltip for helpful information that can guide you in resolving the issue.
Explore the Power of the DISC Function in Google Sheets with Crawlan.com
Now that you have mastered the DISC function in Google Sheets, it’s time to put your financial skills to the test. Visit Crawlan.com to discover more insights, tips, and tricks to make the most of Google Sheets and other powerful tools.
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That’s all for now. Enjoy unleashing your financial expertise!
Disclaimer: The information provided in this article is for educational purposes only. Please consult a financial professional for personalized advice.
