The Excel DISC Function

Related Functions:

PRICE Function
YIELD Function

Function Description

The Excel DISC function calculates the Discount Rate for a security.

The syntax of the function is:

DISC( settlement, maturity, pr, redemption, [basis] )

Where the arguments are as follows:

settlement

The security's settlement date (i.e. the date that the coupon is purchased).

maturity

The security's maturity date (i.e. the date that the coupon expires).

The security's price per $100 face value.

redemption

The security's redemption value per $100 face value.

[basis]

An optional argument which defines the day count basis to be used in the calculation. Possible values are:

Basis	Day Count Basis
0 (or omitted)	US (NASD) 30/360
1	actual/actual
2	actual/360
3	actual/365
4	European 30/360

The financial day count basis rules are explained further on the Wikipedia Day Count Convention page

Note that the settlement and maturity dates should be input to the Disc function as either:

References to cells containing dates

Dates returned from formulas.

Warning: If you attempt to input text representations of dates into Excel functions, the interpretion of these can vary, depending to the date system and date interpretation settings on your computer.

Disc Function Example

In the following example, the Excel Disc function is used to calculate the discount rate of a security purchased on 01-Apr-2016, with Maturity date 31-Mar-2021. The price per $100 face value is $95, the Redemption value is $100, and the US (NASD) 30/360 day count basis is used:

	A	B
1	Settlement Date:	01-Apr-2016
2	Maturity Date:	31-Mar-2021
3	=DISC( B1, B2, 95, 100 )

The above function returns the value 0.01.

I.e. the discount rate for a security with the above terms is 1.0%.

Note that, in the above example:

As recommended, the date arguments have been supplied to the Disc function as references to cells containing dates;
As the [basis] argument has been omitted, the function uses the default value 0 (denoting the US (NADS) 30/360 day count basis).

For further examples of the Excel Disc function, see the Microsoft Office website.

Disc Function Errors

If you get an error from the Excel Disc function, this is likely to be one of the following:

Common Errors

#NUM!

Occurs if either:

The supplied maturity date ≤ the settlement date;
Invalid numeric values are input for the pr, redemption or [basis] arguments
(i.e. if either: pr ≤ 0; redemption ≤ 0; or [basis] is supplied and is not equal to 1, 2, 3 or 4).

#VALUE!

Occurs if either:

The supplied settlement or maturity arguments are not a valid Excel dates;
Any of the supplied arguments are non-numeric.

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