Formula generator for DURATION function
The DURATION function calculates the number of compounding periods required for an investment of a specified present value appreciating at a given rate to reach a target value. It takes into account the settlement date, maturity date, interest rate, yield, compounding frequency, and optional day count convention.
Formula generator
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How to generate an DURATION formula using AI.
To obtain information on the ARRAY_CONSTRAIN formula, you could ask the AI chatbot the following question: “To get the DURATION formula, you can ask the AI chatbot the following question: "What Excel formula can I use to calculate the duration of an investment with a given interest rate, present value, future value, and number of coupon payments per year?"”
DURATION formula syntax
The DURATION function in Excel calculates the Macaulay duration of a security, which is a measure of its price sensitivity to changes in interest rates. The syntax for the DURATION function is: DURATION(settlement, maturity, coupon, yld, frequency, [basis]) - settlement: The settlement date of the security. - maturity: The maturity date of the security. - coupon: The annual coupon rate of the security. - yld: The annual yield of the security. - frequency: The number of coupon payments per year. - [basis]: Optional argument that specifies the day count basis to use for calculations. Note that the settlement and maturity dates should be valid Excel dates, and the coupon, yield, and frequency should be numeric values. The basis argument is optional and defaults to 0 if not provided. The DURATION function returns the Macaulay duration of the security, which represents the weighted average time until the security's cash flows are received. It is expressed in years and can help investors assess the interest rate risk associated with a bond or other fixed-income security.
Use Cases & Examples
In these use cases, we use the DURATION formula to calculate the duration between two dates or times. The DURATION formula takes into account the start date/time, end date/time, and any additional parameters such as the number of working days or holidays to exclude. It returns the duration in the specified time unit, such as days, hours, or minutes.
Investment Duration Calculation
Description
Calculates the number of compounding periods required for an investment of a specified present value appreciating at a given rate to reach a target value.
Result
DURATION(settlement, maturity, rate, yield, frequency, [day_count_convention])
Bond Yield Calculation
Description
Calculates the yield of a bond based on its settlement date, maturity date, coupon rate, price, and redemption value.
Result
YIELD(settlement, maturity, rate, pr, redemption, frequency, [basis])
Loan Amortization Schedule
Description
Generates an amortization schedule for a loan, showing the periodic payment amount, interest paid, principal paid, and remaining balance
Result
PPMT(rate, per, nper, pv, [fv], [type])
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Include Key Details
Include important details such as column names, data ranges, and specific criteria that need to be considered in the formula. The more precise and specific you are, the better the AI can generate an appropriate formula.
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FAQ
Frequently Asked Questions
- The DURATION function in Excel calculates the Macaulay duration of a security with an assumed par value of $100. It is commonly used in financial analysis to measure the weighted average time until the cash flows from a bond are received.
- To use the DURATION function in Excel, you need to provide the required arguments: settlement, maturity, coupon, yield, frequency, [basis]. The settlement, maturity, coupon, yield, and frequency are all required arguments, while [basis] is optional. The function returns the Macaulay duration of the security.
- The settlement argument in the DURATION function represents the settlement date of the security. It is the date on which the security is purchased.
- The maturity argument in the DURATION function represents the maturity date of the security. It is the date on which the security will reach its final payment.
- The coupon argument in the DURATION function represents the annual coupon rate of the security. It is the interest rate paid by the security.