DURATION Excel Function

The DURATION Excel function is the Macauley duration We can define Duration as the weighted average of the present value of cash flows, and it is used to measure an investment price’s response to changes in yield argument.

The syntax of the DURATION Excel function is =DURATION(settlement, maturity, coupon, yld, frequency, basis)

We can insert the DURATION function in Excel as follows:
1. Select an empty cell for the output.
2. Type =DURATION( in the selected cell. [Alternatively, type =D or =DU and double-click the DURATION function from the list of suggestions shown by Excel.]
3. Enter the arguments as cell values or cell references and close the brackets.
4. Press the “Enter” key.

For example, the image depicts the values of the investment made by XYZ firm, and we will the output using the DURATION Excel function.

In the table, the data is,
● Column A contains the Description.
● Column B contains the Value.



The procedure to calculate the value using the DURATION function is,
Select cell B4, enter the formula =DURATION(B2,B3,2%,3%,4), and press the “Enter” key.

[Note: The value of ‘settlement’ is B2, ‘maturity’ is B3, ‘coupon’ is 2%, ‘yld’ is 3%, and ‘frequency’ is 4.]

The result is “33.3606166”, as shown below.

The DURATION Excel function is in the “Formulas” tab, as shown below.

Choose an empty cell for the output 🡪 select the “Formulas” tab 🡪 go to the “Function Library” group 🡪 click the “Financial” option drop-down 🡪 select the “DURATION” function, as shown below.