ACCRINTM function

The ACCRINTM function in Excel calculates the accrued interest for a security that pays interest at maturity. It is similar to the ACCRINT function, but it is specifically used for securities where all interest is paid at the maturity date (i.e., no periodic interest payments are made during the life of the security).

Syntax

ACCRINTM(issue, settlement, rate, par)

Parameters

• issue: The date the security is issued. This is the date the bond or security was originally issued.
• settlement: The settlement date of the security, which is the date after the issue date when the security is traded to the buyer.
• rate: The annual coupon interest rate of the security. This is the percentage of the face value that is paid as interest at maturity.
• par: The face value or principal amount of the security, typically 100 or 1000, depending on the security.

How It Works

The ACCRINTM function calculates the accrued interest for a bond or other fixed-income security that pays interest only at the maturity date. The interest is typically calculated based on the number of days between the issue date and the settlement date, and the bond’s annual interest rate. The ACCRINTM function returns the interest amount that has accrued from the issue date to the settlement date.

Example

Assume you have a bond with the following details:

• Issue date: January 1, 2023
• Settlement date: April 1, 2023
• Annual interest rate: 6% (annual coupon rate)
• Face value (par): 1000

To calculate the accrued interest for this bond, you can use the following formula:

=ACCRINTM("1/1/2023", "4/1/2023", 0.06, 1000)

This formula calculates the accrued interest from the issue date (January 1, 2023) to the settlement date (April 1, 2023) for a security that pays all interest at maturity.

Important Notes

• The ACCRINTM function is specifically designed for securities that do not pay periodic interest but instead pay the full interest amount at maturity. This is common for zero-coupon bonds or similar securities.
• The result is calculated as the interest accrued up to the settlement date.
• The ACCRINTM function does not require the frequency or basis parameters, unlike the ACCRINT function.

Summary

The ACCRINTM function in Excel is useful for calculating the accrued interest on a security that pays interest at maturity. It is commonly used for zero-coupon bonds or other types of securities where interest is paid only at the end of the bond’s term, and there are no periodic interest payments.