ACCRINTM Function in excel is the upgrade version of ACCRINT.
ACCRINTM Function is used to calculate the returns of accrued interest for a security that pays interest at maturity. Accrued interest is the amount receivable and when we talk about maturity, it means when the person receives the interest over the said bond or share at the end of its completion.
So, the basic difference between ACCRINT function and ACCRINTM function is that:
ACCRINT gives us the total returns we will receive over the frequency we have set- it can be yearly, half-yearly or quarterly.
ACCRINTM gives us the total returns that we will receive at the time of maturity.
To get a clearer picture, let’s take an example for the same.
As you can see in the image above, we have taken the following:
- Issue Date: It is the date on which the bond or share is issued to you.
- Settlement Date: This is the day when the amount is being settled.
- Annual Rate: This is the rate at which we will receive the interest.
- Par Value: This is the value in which we will put the rate to confirm the interest we will get on the particular bond/ share.
Step1: Input the Formula
The formula for ACCRINTM is as follows:
As you can observe that after inputting the formula, there is a small box appearing below it.
Step2: Input the values in the Formula
The first value that the formula expects is the issue date.
As per the example, our issue date is 01-02-2019 which is on cell A2.
So, we will select the same and put a coma afterwards.
Then comes the settlement.
The settlement date in our example is 01-07-2019, i.e. cell B2. After entering the same we move towards the rate.
The annual rate is 8% i.e. we will get the interest on our bond/ share of 8% at the time of maturity.
So, we select cell D2 for the same.
Then comes the Par value.
The par value is 10,000 which is cell F2.
After the same is done, we come to the point of basic.
As you can see in the image above, there are five options for the same.
- 0 is for the format of US
- 1 works as the actual, i.e. the no. of days in a year according to India.
- 2 considers 360 days in a year.
- 3 considers 365 days I a year.
- And 4 considers the European format.
Generally, people pic option 1 because the same describes the result as per the actual number of days in a year system.
So, after choosing option “1”
Press “Enter” and our answer pops into the screen i.e. 333.3333333.