The PRICE function calculates the price per 100 monetary units invested for a bond that pays periodic interest.
You can use PRICE to calculate how much you pay against the bond's final value, and therefore the return on your investment.
PRICE(Settlement, Maturity, Rate, Yield, Redemption, Frequency[, Basis])
|Settlement (required)||Date||The bond settlement date: The date the bond is traded to the buyer.|
|Maturity (required)||Date||The bond maturity date: The date when the bond expires.|
|Rate (required)||Number||The bond annual coupon date.|
|Yield (required)||Number||The bond annual yield.|
|Redemption (required)||Number||The payment received when the bond reaches maturity.|
The number of coupon payments per year.
The basis determines how many days exist in a year.
A full year has:
US 30/360 is the default basis for COUPDAYS. It can also be specified by entering 0.
To use a different type of day count basis, enter:
Learn about the conventions used to calculate the day count for basis.
The PRICE function returns a number.
For bonds that pay two or more coupons between settlement and maturity, the price is calculated with this formula:
For a bond that pays one coupon between settlement and maturity, the price is calculated with this formula:
Where bonds have a zero rate and do not pay a coupon, the price is calculated with this formula:
In these formulas:
- E is the number of coupon days in the coupon period containing the settlement
- A is the number of coupon days before settlement
- DSC is the number of coupon days between the settlement and the next coupon
- DSR is the number of coupon days between the settlement and the maturity
- yld is the yield
- N is the total number of coupon periods between settlement and maturity
- n is the number of years to maturity as a fraction (calculated using a basis)
- The settlement and maturity dates must be valid dates between 01/01/1900 and 12/31/2399.
- The maturity date must be later than the settlement date.
- The rate must be greater than zero.
- The yield must be greater than negative one.
- The redemption must be greater than zero.
- The frequency must be either 1 (annual), 2 (semi-annual), or 4 (quarterly).
- The basis, when specified, must be either 0 (US 30/360), 1 (Actual/Actual), 2 (Actual/360), 3 (Actual/365), or 4 (EUR 30/360).
This example shows a PRICE calculation that specifies a basis.
The example has a:
This example shows a PRICE calculation that does not specify a basis. As a result, the basis defaults to US 30/360.
The example has a: