The Excel Price function calculates the price, per $100 face value of a security that pays periodic interest.
The syntax of the function is :
Where the arguments are as follows:
|settlement||-||The settlement date of the security (ie. the date that the coupon is purchased)|
|maturity||-||The maturity date of the security (ie. 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|
|[basis]||-||An optional integer argument which specifies the financial day count basis that is used by the security. Possible values are:|
|[basis]||-||The financial day count basis rules are explained in detail on the Wikipedia Day Count Convention page|
Note that the date arguments should be entered into the function as either:
In the following example, the Excel Price function is used to calculate the price per $100 face value of a coupon 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:
|3||=PRICE( B1, B2, 12%, 10%, 100, 2 )|
The function calculates the Price per $100 face value to be $110.83.
- i.e. a bond with the above terms would be valued at $110.83
Note that, in the above example:
Further examples of the Excel Price function can be found on the Microsoft Office website.
If you get an error from the Price function, this is likely to be one of the following:
Occurs when Analysis ToolPak add-in is not enabled in your Excel.