Price Function in Excel (Formula, Examples)

Price function in excel is a financial function in excel which is used to calculate the original value or the face value for a stock for per 100 dollars given the interest is paid periodically, this is an inbuilt function in excel and takes six arguments which are settlement value maturity rate, rate of the security and yield of the security with the redemption value.

Price in Excel (Table of Contents)

Price Function in Excel
Price Formula
How to use the Price in Excel?

Price Function in Excel

The Price in Excel is categorized under Financial functions. The Price excel function is used to calculate the price of a security/bond, per $100 face value of a security that pays a periodic interest.

Price Formula

The Price formula has 7 arguments:

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Explanation of Price in Excel

Settlement : Settlement is referred as the date on which the bond settled. The value mentioned as settlement is the date after the issuing date when the bond/security is traded to the security buyer.
Maturity : The date mentioned as Maturity is the date when the security/bond expires, and the principal amount is paid back to the bond holder
Rate : The bonds annual interest rate at which coupon payments are made.
Yld : The security’s annual yield i.e the annual market interest rate representative of the risk of the bond.
Redemption : The bond value per $100 face value that is paid back on the redemption date
Frequency : The number of times coupon payments done per year.

Basis : This is optional integer argument which specify the financial day counting basis

How to use the Price Function in Excel?

Price Excel function is very simple and easy to use. Let’s understands the working of Price Excel Function with examples.

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You can download this Price Function Excel Template here – Price Function Excel Template

Price in Excel Example #1

Suppose we are given the following data to calculate the price in excel

The following screenshot is used illustrates how PRICE function excel is used to price a bond.

Things to be Remember while using Excel Price Function

For Calculation purpose, the Date format in Excel is sequential. So By default, Value 1 stands for 1^st January, 1900 , so the next day i.e 2^nd January 1900 would be 2
All the Data parameters used as Settlement, maturity, frequency, and basis value should be integers.
If maturity or the settlement day is not a valid date, then the formula PRICE returns the #VALUE! error value.
If yld < 0 or if rate < 0 or redemption ≤ 0 PRICE returns the #NUM! error value.
If frequency mentioned in the price formula is any other value apart from 1, 2, or 4, PRICE will return the #NUM! error value as answer.
If basis < 0 or if basis > 4, PRICE returns the #NUM! error value.
If settlement value ≥ maturity value then PRICE returns will return #NUM! error value.