Microsoft Office Tutorials and References

In Depth Information

**Examples of Functions for Bond Investors**

•
values

values
—
This is a series of cash flows that corresponds to a

schedule of payments in dates. The first payment is optional and cor-

responds to a cost or payment that occurs at the beginning of the in-

vestment. If the first value is a cost or payment, it must be a negative

value. All succeeding payments are discounted based on a 365-day

year. The series of values must contain at least one positive and one

negative value.

•
dates

dates
—
This is a schedule of payment dates that corresponds to the

cash flow payments. The first payment date indicates the beginning of

the schedule of payments. All other dates must be later than this

date, but they may occur in any order.

•
guess

guess
—
This is a number that you guess is close to the result of

XIRR.

Caution

The algorithm behind the XIRR function is new and more accurate in Ex-

cel 2013. Be aware that Excel 2007 and Excel 2013 might produce dif-

ferent results for some uses of XIRR.

Numbers in datesare truncated to integers. XIRR expects at least one positive

cash flow and one negative cash flow; otherwise, XIRR returns a #NUM! er-

ror. If any number in datesis not a valid date, XIRR returns a #NUM! error.

If any number in datesprecedes the starting date, XIRR returns a #NUM! er-

ror. If valuesand datescontain different numbers of values, XIRR returns

a #NUM! error. In most cases, you do not need to provide guessfor the XIRR

calculation. If it is omitted, guessis assumed to be 0.1, which is 10%.

XIRR is closely related to XNPV, the net present value function. The rate of

return calculated by XIRR is the interest rate corresponding to XNPV = 0.

Examples of Functions for Bond Investors

A bond is an I.O.U. in which you lend an amount to the issuer. The issuer pays

you periodic interest payments and at the maturity date of the bond returns

your money. Various governments issue many bonds. Bond maturities can ex-

tend anywhere from 1 day to 30 years. Many concepts and terms apply to the

bond functions.