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The Excel PRICE Function
Basic 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 (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 
frequency    The number of coupon payments per year. This must be one of the following: 1    Annually  2    SemiAnnually  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 

[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:
 References to cells containing dates
or Dates returned from formulas
Warning:
 If you attempt to input the date arguments as text, there is a chance that these may be interpreted differently, due to the date system and date interpretation settings on your computer.
 Although you can enter dates as serial numbers, this is not recommended, as date serial numbering varies across different computer systems.
Excel Price Function Example
In the following example, the Excel Price function is used to calculate the price per $100 face value of a coupon purchased on 01Apr2012, with maturity date 31Mar2020 and a rate of 12%. The yield is 10% and the redemption value is $100. Payments are made semiannually and the US (NASD) 30/360 day count basis is used:
 A  B 

1  Settlement Date:  01Apr2012 

2  Maturity Date:  31Mar2020 

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:
 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).
Further examples of the Excel Price function can be found on 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 is ≥ maturity date
or 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:  any of the supplied arguments are nonnumeric
or the settlement or the maturity arguments are not valid dates

#NAME?    Occurs when Analysis ToolPak addin is not enabled in your Excel. You will need to enable the addin if you want to use the Excel Price function.
+ Show How to Do This in Excel 2003:
 From the Tools dropdown menu, select the option AddIns ...
 An 'AddIns' window will pop up. From this, select the option Analysis ToolPak and click OK
+ Show How to Do This in Excel 2007:
 Click the Microsoft button on the top left of your spreadsheet and select
the Excel Options button
 From the menu on the left hand side, select AddIns
 In the 'Manage:' box, select Excel Addins and click Go...
 An 'AddIns' window will pop up. From this, select the option Analysis ToolPak and click OK
+ Show How to Do This in Excel 2010 or Excel 2013:
 Click the File tab (top left of your spreadsheet) and select Options
 From the menu on the left hand side, select AddIns
 If the window that pops up doesn't show the 'Addins' list, use the 'Manage:'
dropdown menu (at the bottom of the window) to select Excel Addins. Click Go...
 From the 'AddIns' window, select the option Analysis ToolPak and click OK
