TBILLEQ Function

Calculates the bond-equivalent yield of a T-bill

Over 2 million + professionals use CFI to learn accounting, financial analysis, modeling and more. Unlock the essentials of corporate finance with our free resources and get an exclusive sneak peek at the first module of each course. Start Free

What is the TBILLEQ Function?

The TBILLEQ Function[1] 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.

Formula

=TBILLEQ(settlement, maturity, discount)

The TBILLEQ function uses the following arguments:

  1. Settlement (required argument) – This is the settlement date of the T-bill. It is the date after the issue date when the T-bill is traded to the buyer.
  2. Maturity (required argument) – The date when the T-bill will expire. It must be greater than and within one year of the settlement date. This is so, as the life of T-bills is less than one year.
  3. Discount (required argument) – The T-bill discount rate. We can take from the risk-free investment rate if unavailable.

While entering the dates in the argument, they should be:

  • References to cells containing dates; or
  • Dates returned from formulas.

How to use the TBILLEQ Function in Excel?

To understand the uses of the TBILLEQ function, let’s consider an example:

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%.

TBILLEQ Function

The formula to use is:

TBILLEQ Function - Example 1

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:

TBILLEQ Function - Example 1a

We change the format to a percentage basis:

TBILLEQ Function - Example 1c

 

Things to remember about the TBILLEQ Function

  1. The TBILLEQ function was introduced in Excel 2003 and is available in all subsequent Excel versions.
  2. The settlement and maturity arguments are truncated to integers.
  3. #NUM! error – Occurs when:
    • Settlement date is ≥ maturity date.
    • Maturity date is more than 1 year after the settlement date.
    • Discount argument is less than or equal to 0.
  4. #VALUE! error – Occurs when:
    • Settlement date is an invalid date.
    • Maturity date is an invalid date.
    • The arguments provided are non-numeric.

Click here to download the sample Excel file

Additional Resources

Thanks for reading CFI’s guide to important Excel functions! By taking the time to learn and master these functions, you’ll significantly speed up your financial analysis. To learn more, check out these additional CFI resources:

Article Sources

  1. TBILLEQ Function

Excel Tutorial

To master the art of Excel, check out CFI’s Excel Crash Course, which teaches you how to become an Excel power user. Learn the most important formulas, functions, and shortcuts to become confident in your financial analysis.

Launch CFI’s Excel Course now

to take your career to the next level and move up the ladder!

0 search results for ‘