DURATION

The DURATION function in Google Sheets is a powerful tool that calculates the number of compounding periods required for an investment of a specified present value appreciating at a given rate to reach a target value.

Function Syntax and Parameters

Syntax: DURATION(settlement, maturity, rate, yield, frequency, [day_count_convention])

Parameters:

• settlement: The settlement date of the security.
• maturity: The maturity date of the security.
• rate: The annual coupon rate of the security.
• yield: The annual yield of the security.
• frequency: The number of coupon payments per year.
• day_count_convention: [Optional] The day count convention used (e.g., "ACT/ACT" for actual/actual).

Step-by-Step Tutorial

1. Calculating the duration:
   • Example: =DURATION("1/1/2022", "12/31/2025", 5%, 6%, 2, "ACT/ACT")

Use Cases and Scenarios

1. Bond Valuation: Determine the time it takes for a bond investment to reach a specific target value.
2. Portfolio Management: Analyze the duration of different securities to manage risk and optimize investment strategies.

Related Functions

• None

Related Articles

• None