logo-v-light

Our Service

YEARFRAC

In this comprehensive guide, we will explore the YEARFRAC formula in Excel. The YEARFRAC function calculates the fraction of a year between two dates, which can be useful in various financial calculations, such as determining the interest on a loan or calculating the age of an individual. We will cover the syntax, examples, tips and tricks, common mistakes, troubleshooting, and related formulae for the YEARFRAC function.

YEARFRAC Syntax

The syntax for the YEARFRAC function in Excel is as follows:

YEARFRAC(start_date, end_date, [basis])

Where:

  • start_date (required) – The start date of the period you want to calculate the fraction of a year for.
  • end_date (required) – The end date of the period you want to calculate the fraction of a year for.
  • basis (optional) – The type of day count basis to use. If omitted, the default value is 0 (US 30/360).

The available day count basis options are:

  1. 0 or omitted – US 30/360 (NASD)
  2. 1 – Actual/actual (also known as Act/Act or A/A)
  3. 2 – Actual/360
  4. 3 – Actual/365
  5. 4 – European 30/360

YEARFRAC Examples

Let’s look at some examples of using the YEARFRAC function in Excel:

  1. Basic example: Suppose you want to calculate the fraction of a year between January 1, 2022, and December 31, 2022, using the US 30/360 basis. The formula would be:

    =YEARFRAC(“1/1/2022”, “12/31/2022”, 0)

    The result would be 1, indicating that the period covers one full year.

  2. Using different day count basis: If you want to calculate the fraction of a year between January 1, 2022, and December 31, 2022, using the Actual/actual basis, the formula would be:

    =YEARFRAC(“1/1/2022”, “12/31/2022”, 1)

    The result would be approximately 0.9973, indicating that the period covers approximately 99.73% of a year.

  3. Calculating age: To calculate the age of a person born on January 1, 1990, as of December 31, 2022, using the Actual/actual basis, the formula would be:

    =YEARFRAC(“1/1/1990”, “12/31/2022”, 1)

    The result would be approximately 32.9973, indicating that the person is approximately 32.9973 years old.

YEARFRAC Tips & Tricks

  • When using YEARFRAC to calculate age, you can use the INT function to round down the result to the nearest whole number. For example:

    =INT(YEARFRAC(“1/1/1990”, “12/31/2022”, 1))

    This would return 32, indicating that the person is 32 years old.

  • If you want to calculate the number of days between two dates, you can use the DATEDIF function with the “d” unit. For example:

    =DATEDIF(“1/1/2022”, “12/31/2022”, “d”)

    This would return 364, indicating that there are 364 days between January 1, 2022, and December 31, 2022.

Common Mistakes When Using YEARFRAC

  • Incorrect date format: Make sure to use a valid date format when entering the start_date and end_date arguments. Excel may not recognize the date if it is entered in an incorrect format, resulting in an error or incorrect calculation.
  • Invalid basis value: Ensure that the basis value is between 0 and 4. Using an invalid basis value will result in an error.
  • Start date after end date: If the start_date is after the end_date, the YEARFRAC function will return a negative value. Make sure to enter the dates in the correct order.

Why Isn’t My YEARFRAC Working?

If your YEARFRAC function is not working, consider the following troubleshooting steps:

  1. Check the date format: Ensure that the start_date and end_date arguments are entered in a valid date format recognized by Excel.
  2. Verify the basis value: Make sure that the basis value is between 0 and 4. Using an invalid basis value will result in an error.
  3. Confirm the date order: If the start_date is after the end_date, the YEARFRAC function will return a negative value. Make sure to enter the dates in the correct order.

YEARFRAC: Related Formulae

Here are some related formulae that you might find useful when working with dates and time in Excel:

  1. DATEDIF: Calculates the difference between two dates based on a specified interval, such as days, months, or years.
  2. EDATE: Returns the date that is a specified number of months before or after a given date.
  3. EOMONTH: Returns the last day of the month that is a specified number of months before or after a given date.
  4. NETWORKDAYS: Calculates the number of working days between two dates, excluding weekends and optionally specified holidays.
  5. WORKDAY: Returns the date that is a specified number of working days before or after a given date, excluding weekends and optionally specified holidays.

By understanding the YEARFRAC function and its related formulae, you can perform a wide range of calculations involving dates and time in Excel. This comprehensive guide should provide you with all the information you need to effectively use the YEARFRAC function in your spreadsheets.

Related

Did you find this article useful?

Share it with your friends or colleagues

About Aepoch Advisors

We are a boutique accounting and consulting firm servicing international businesses operating in China. We offers book keeping and business advisory service. We also help our clients select and implement SAAS business applications. 
 
Cloud technology significantly reduces cost foreign companies traditionally spent on tax compliance and ERP systems. Our cloud professionals can help with streamlining your management and controling structure, as well as advising you on how to reduce risks and maximize profits with software purposely built for Chinese business. Contact us today to learn more about our services.
Learn More