## Summary

The Excel DISC function returns the discount rate for a security.

## Purpose

Get discount rate for a security

## Return value

Discount rate as percentage

## Syntax

``=DISC(settlement,maturity,pr,redemption,[basis])``
• settlement - Settlement date of the security.
• maturity - Maturity date of the security.
• pr - Security price per \$100 face value.
• redemption - Security redemption value per \$100 face value.
• basis - [optional] Day count basis (see below, default =0).

## How to use

The Excel DISC function returns the discount rate for a security. A discounted security does not pay periodic interest, but has a specified redemption value at maturity. The return on a discounted security is the difference between the price and redemption value.

Discount rate is based on the concept of the time value of money. The discount rate is the interest used to convert between future value and present value. A future value can be "discounted" by a given interest rate to determine the present value.

### Example

In the example shown, we want to find the discount rate for a bond with a price of \$89.50 and a redemption value of \$100. The settlement date is 6-Jul-2017 and the maturity date is 15-Jan-2020. The day count basis is US (NASD) 30/360. The formula in F5 is:

``````=DISC(C7,C8,C5,C9,C10)
``````

With these inputs, the DISC function returns 4.16%, with percentage number format applied.

### Entering dates

In Excel, dates are serial numbers. Generally, the best way to enter valid dates is to use cell references, as shown in the example. To enter valid dates directly inside a function, you can use the DATE function. To illustrate, the formula below has all values hardcoded, and the DATE function is used to supply each of the two required dates:

``````=DISC(DATE(2017,7,6),DATE(2020,1,15),89.5,100,0)
``````

### Basis

The basis argument controls how days are counted. The DISC function allows 5 options (0-4) and defaults to zero, which specifies US 30/360 basis. This article on wikipedia provides a detailed explanation of available conventions.

Basis Day count
0 or omitted US (NASD) 30/360
1 Actual/actual
2 Actual/360
3 Actual/365
4 European 30/360

### Notes

• In Excel, dates are serial numbers
• All dates, and basis, are truncated to integers.
• If dates are invalid (i.e. not actually dates) DISC returns #VALUE!
• DISC returns #NUM when:
• settlement >= maturity
• pr <= 0 or redemption <= 0
• Basis is out-of-range

Author

### Dave Bruns

Hi - I'm Dave Bruns, and I run Exceljet with my wife, Lisa. Our goal is to help you work faster in Excel. We create short videos, and clear examples of formulas, functions, pivot tables, conditional formatting, and charts.