Calculates the bond-equivalent yield of a T-bill
The TBILLEQ Function is categorized under Excel Financial functions. The function helps calculate the bond-equivalent yield of a T-bill.
In financial analysis, if we wish to compare T-bills yields with bond yields, we can use TBILLEQ.
=TBILLEQ(settlement, maturity, discount)
The TBILLEQ function uses the following arguments:
While entering the dates in the argument, they should be:
To understand the uses of the TBILLEQ function, let’s consider an example:
We wish to calculate the bond-equivalent yield for a Treasury bill with a settlement date of February 1, 2016, maturity date of January 30, 2017, and a discount of 3.5%.
The formula to use is:
TBILLEQ is calculated as TBILLEQ = (365 x rate)/(360–(rate x DSM)), where DSM is the number of days between settlement and maturity computed according to the 360 days per year basis.
We get the result below:
We change the format to a percentage basis:
Click here to download the sample Excel file
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