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.
Thesettlementdate is 6-Jul-2017 and thematuritydate is 15-Jan-2020.
The day countbasisis US (NASD) 30/360.
Entering dates
In Excel,dates are serial numbers.
To enter valid dates directly inside a function, you’ve got the option to use theDATE function.
The DISC function allows 5 options (0-4) and defaults to zero, which specifies US 30/360basis.
Thisarticle on wikipediaprovides a detailed explanation of available conventions.
