How to Use Excel's COUPDAYS Function

By eHow Computers Editor

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Excel's COUPDAYS function calculates the number of days in the period containing the settlement date. It can be remembered by the mnemonic "COUPon DAY Settlement" and is a member of Excel's financial library.

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Instructions

Difficulty: Moderate

Step1

Install the Analysis ToolPak if COUPDAYS returns the #NAME? error value. Select Add-Ins from the Tools menu, check the box next to the Analysis ToolPak and click on the OK button to install it.

Step2

Learn the syntax for COUPDAYS. It is COUPDAYS(settlement_date,maturity_date,payment_frequency[,basis]) where settlement_date is the date the security is sold to the buyer, maturity_date is the date the security expires, payment_frequency is the number of payments made per year and basis describes how the number of days in the month and year are to be calculated.

Step3

Specify the basis, if needed. It defaults to zero, which indicates the days in the month are counted using the United States' 30-day method with a 360-day year. A 1 uses the actual number of days in the month and year. A 2 counts the actual days in the month with a 360-day year while a 3 assumes a 365-day year. A 4 is the same as 1 but uses the European 30-day method.

Step4

Interpret the error values returned by COUPDAYS. This function will return the #VALUE! error value if settlement_date or maturity_date is not valid. COUPONDAYS will return the #NUM! error value if frequency is not 1, 2 or 4, if basis is not 1, 2, 3 or 4, or if the maturity_date occurs before the settlement_date.

Step5

Study an example of COUPDAYS. =COUPDAYS(DATE(2008,1,25),DATE(2008,11,15),2,1) will return 182. This is the number of days in the payment period that contains the settlement date of January 25, 2008, where the maturity date is November 15, 2008, the coupon payments are semiannual, and the actual number of days in the months and years are used.