#EXCEL ADD TIME DURATIONS HOW TO#
How to use the DURATION Function in Excel?Īs a worksheet function, DURATION can be entered as part of a formula in a cell of a worksheet. If we try to input text representations of dates into Excel functions, they may be interpreted differently, depending on the date system and date interpretation settings on our computer. Remember that the date arguments should be encoded into the DURATION function as either: Basis (optional argument) – This is the type of day count basis to be used.For annual payments, the frequency is = 1 for semiannual, frequency is = 2 and for quarterly, frequency = 4. Frequency (required argument) – This is the number of coupon payments per year.Yield (required argument) – The security’s annual yield.Coupon (required argument) – This is the security’s coupon rate.Maturity (required argument) – The security’s maturity date or the date on which the coupon expires.Settlement (required argument) – This is the security’s settlement date or the date on which the coupon is purchased.The DURATION function uses the following arguments: =DURATION(settlement, maturity, coupon, yield, frequency, ) Apart from it, the function is also useful in financial modeling, particularly in predicting future cash flows of investments. The function calculates the duration of a security that pays interest on a periodic basis with a par value of $100.ĭURATION is commonly used by Portfolio Managers who use the immunization strategy. It helps to calculate the Macauley Duration. The DURATION Function is categorized under Excel Financial functions. Updated JanuWhat is the DURATION Function?
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