The Excel PRICE Function

Related Functions:

RATE function
YIELD function

Function Description

The Excel Price function calculates the price, per $100 face value of a security that pays periodic interest.

The syntax of the function is:

PRICE( settlement, maturity, rate, yld, redemption, frequency, [basis] )

Where the arguments are as follows:

settlement

The settlement date of the security (i.e. the date that the coupon is purchased).

maturity

The maturity date of the security (i.e. the date that the coupon expires).

rate

The security's annual coupon rate.

yld

The annual yield of the security.

redemption

The security's redemption value per $100 face value.

frequency

The number of coupon payments per year. This must be one of the following:

1	-	Annually
2	-	Semi-Annually
4	-	Quarterly

[basis]

An optional integer argument which specifies the financial day count basis that is used by the security. Possible values are:

Basis	Day Count Basis
0 (or omitted)	US (NASD) 30/360
1	actual/actual
2	actual/360
3	actual/365
4	European 30/360

The financial day count basis rules are explained in detail on the Wikipedia Day Count Convention page

Warning: If you enter text representations of dates into Excel functions, the interpretation of these can vary, depending to the date system and date interpretation settings on your computer. Therefore, the settlement and maturity dates should be entered into the Price function as either:

References to cells containing dates

Dates returned from formulas.

Excel Price Function Example

In the following example, the Excel Price function is used to calculate the price per $100 face value of a security purchased on 01-Apr-2012, with maturity date 31-Mar-2020 and a rate of 12%. The yield is 10% and the redemption value is $100. Payments are made semi-annually and the US (NASD) 30/360 day count basis is used:

	A	B
1	Settlement Date:	01-Apr-2012
2	Maturity Date:	31-Mar-2020
3	=PRICE( B1, B2, 12%, 10%, 100, 2 )

The above function returns the value 110.8344836.

I.e. a security with the above terms would be valued at $110.83.

Note that, in the above example:

As recommended, the settlement and maturity dates have been input to the function as references to cells containing dates.
The [basis] argument has been omitted, and so the function uses the default value 0 (denoting the US (NADS) 30/360 day count basis).

For further examples of the Excel Price function, see the Microsoft Office website.

Price Function Errors

If you get an error from the Price function, this is likely to be one of the following:

Common Errors

#NUM!

Occurs if either:

The settlement date ≥ maturity date

Invalid numbers are supplied for the rate, yld, redemption, frequency or [basis] arguments.
(I.e. if either: rate < 0; yld < 0; redemption ≤ 0; frequency is any number other than 1, 2 or 4; or [basis] is any number other than 0, 1, 2, 3 or 4).

#VALUE!

Occurs if either:

The supplied settlement or the maturity arguments are not valid Excel dates

Any of the supplied arguments are non-numeric.

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