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The Excel PRICEDISC Function
Basic Description
The Excel Pricedisc function calculates the price, per $100 face value of a discounted security.
The syntax of the function is :
PRICEDISC( settlement, maturity, discount, redemption, [basis] )
Where the arguments are as follows:
| settlement |
- |
The settlement date of the security (ie. the date that the coupon is purchased)
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| maturity |
- |
The maturity date of the security (ie. the date that the coupon expires)
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| discount |
- |
The security's percentage discount rate
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| redemption |
- |
The security's redemption value per $100 face value
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| [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
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Note that the settlement and maturity 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, these may be interpreted
differently, due to the date system and date interpretation settings on your computer. |
| - |
Although you can enter dates directly, as serial numbers, this is not recommended, as date serial
numbering varies across different computer systems. |
Excel Pricedisc Function Example
In the following example, the Excel Pricedisc function is used to calculate the price per $100 face value of a
discounted security purchased on 01-Apr-2011, with maturity date 31-Mar-2015 and a discounted rate of 2.5%. The
redemption value is $100 and the US (NASD) 30/360 day count basis is used:
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A |
B |
| 1 |
Settlement Date: |
01-Apr-2011 |
| 2 |
Maturity Date: |
31-Mar-2015 |
| 3 |
=PRICEDISC( B1, B2, 2.5%, 100 ) |
The function calculates the price per $100 face value to be $90.
Note that, in the above example:
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As recommended, the settlement and maturity dates have been input as references to cells containing dates.
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The discount argument is input as the percentage 2.5%. However, this could, instead, be entered as the simple
numerical value 0.025
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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 Pricedisc function can be found on the
Microsoft Office website.
Pricedisc Function Errors
If you get an error from the Pricedisc function, this is likely to be one of the following:
Common Errors
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#NUM!
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Occurs if either:
| - | the settlement date is ≥ maturity date |
| or | |
| - |
Invalid numbers are supplied for the discount, redemption or basis arguments
(i.e. if either: discount ≤ 0; redemption ≤ 0; or basis is any number other than 0, 1, 2, 3 or 4)
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#VALUE!
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Occurs if either:
| - | any of the supplied arguments are non-numeric |
| or | |
| - | the supplied settlement or the maturity arguments are not a valid Excel dates |
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#NAME?
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-
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Occurs when Analysis ToolPak add-in is not enabled in your Excel.
You will need to enable the add-in if you want to use the Excel Pricedisc function.
To do this in Excel 2003 :
- From the Tools drop-down menu, select the option Add-Ins ...
- An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak and click OK
To do this in Excel 2007 or Excel 2010 :
- 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 Add-Ins
- In the 'Manage:' box, select Excel Add-ins and click Go...
- An 'Add-Ins' window will pop up. From this, select the option Analysis ToolPak
and click OK
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