Forfaiting Calculations

A discount-to-yield or straight discount calculation takes the following steps:

• Calculate the total number of days between disbursement and maturity; adjust for non-working days and add the grace days.
• Calculate the number of whole year periods (for annual yield) or 183-/182-day-periods (for semi-annual yield).
• Calculate a factor as described below (basis 365/360).
• The face value is divided by this factor to give the net value (multiplied in the case of Straight Discount).

A Microsoft Excel spreadsheet with these calculations is available for download below.  This resource was provided by VEFI (The Association of Forfaiters in Switzerland).