When you evaluate a Treasury bill, you’ll occasionally know the start date, end date, and price, but not the yield. If you know those first three values, you can calculate the yield by using the TBILLYIELD function. If the formula returns an error, check your settlement date and maturity date. T-bills have a life of one year or less, so you might have entered a date incorrectly.
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- Exercise Files
- [Voiecover] When you evaluate an investment…in a Treasury Bill,…you will occasionally know the Start Date and End Date,…but not the Yield.…In this movie, I will show you how to calculate…the Annual Percentage Yield…based on the Settlement Date, Maturity Date,…and Price that you have to pay for the investment.…My sample file is TBillYield 0509…and you can find it in the Chapter Five Folder…of the Exercise Files Collection.…There are three things that you need to know…for this particular investment…and the first is the settlement date.…
The settlement date is the date that you take possession…of the investment, in this case a T-Bill.…Next is the maturity date, and that is when…you receive your principal as well as accumulated interest…which corresponds to the face value of the T-Bill.…Next is the price,…that is what you have to pay to purchase the investment.…And finally, the face value, which is a fourth item…and not something that's included in the formula…but it's assumed.…That is the face value for the investment is $100.…
- Analyzing loans, payments, and interest
- Calculating depreciation
- Determining values and rates of return
- Calculating bond coupon dates and security durations
- Calculating security prices and yields
- Calculating prices and yields of securities with odd periods
Skill Level Intermediate
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 24s
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