# What is the PRICE Excel Function Used for?

Now we are going to learn all about formulas and functions. This is the best way to learn them:

## PRICE

Returns the price per \$100 face value of a security that pays periodic interest.

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

The PRICE function syntax has the following arguments:

• Settlement Required. The security’s settlement date. The security settlement date is the date after the issue date when the security is traded to the buyer.
• Maturity Required. The security’s maturity date. The maturity date is the date when the security expires.
• Rate Required. The security’s annual coupon rate.
• Yld Required. The security’s annual yield.
• Redemption Required. The security’s redemption value per \$100 face value.
• Frequency Required. The number of coupon payments per year. For annual payments; frequency = 1; for semiannual; frequency = 2; for quarterly; frequency = 4.
• Basis Optional. The type of day count basis to use.
 BASIS DAY COUNT BASIS 0 or omitted US (NASD) 30/360 1 Actual/actual 2 Actual/360 3 Actual/365 4 European 30/360

### Remarks

• Microsoft Excel stores dates as sequential serial numbers so they can be used in calculations. By default; January 1; 1900 is serial number 1; and January 1; 2008 is serial number 39448 because it is 39;448 days after January 1; 1900.
• The settlement date is the date a buyer purchases a coupon; such as a bond. The maturity date is the date when a coupon expires. For example; suppose a 30-year bond is issued on January 1; 2008; and is purchased by a buyer six months later. The issue date would be January 1; 2008; the settlement date would be July 1; 2008; and the maturity date would be January 1; 2038; which is 30 years after the January 1; 2008; issue date.
• Settlement; maturity; frequency; and basis are truncated to integers.
• If settlement or maturity is not a valid date; PRICE returns the #VALUE! error value.
• If yld < 0 or if rate < 0; PRICE returns the #NUM! error value.
• If redemption <= 0; PRICE returns the #NUM! error value.
• If frequency is any number other than 1; 2; or 4; PRICE returns the #NUM! error value.
• If basis < 0 or if basis > 4; PRICE returns the #NUM! error value.
• If settlement => maturity; PRICE returns the #NUM! error value.
• PRICE is calculated as follows:where:
• DSC = number of days from settlement to next coupon date.
• E = number of days in coupon period in which the settlement date falls.
• N = number of coupons payable between settlement date and redemption date.
• A = number of days from beginning of coupon period to settlement date.

### Interactive Example

Change the white cells data and see the result in the yellow cell.