# Price Function in Excel

Published on :

21 Aug, 2024

Blog Author :

Wallstreetmojo Team

Edited by :

Ashish Kumar Srivastav

Reviewed by :

Dheeraj Vaidya

## Price Function in Excel

The PRICE function in Excel is a financial function used to calculate the original value or the face value for a stock per $100, given the interest is paid periodically. It is a built-in function in Excel and takes six arguments: settlement value maturity rate, security rate, and security yield with the redemption value.

For example, suppose we need to calculate the $100 face value of a bond purchased on 5th May 2018, in cell B1. The bond's maturity date is 15th November 2020, in cell B2. Moreover, the interest rate is 6.5% in cell B3, the yield is 7.2% in cell B4, with a redemption value of $100 in cell B5, and the US (NASD) 30/360-day count basis is used. The payments are made semi-annually.

=PRICE(B1,B2,B3,B4,B5,2,1)

=80.21.

The PRICE function in Excel is categorized under financial functions. For example, the PRICE Excel function calculates the price of a security/bond per $100 face value of a security that pays periodic interest.

##### Table of contents

### Price Formula

The Price formula has 7 arguments:

### Explanation of Price in Excel

**Settlement:**Settlement is referred to as the date on which the bond is settled. The value mentioned as the settlement is the date after the issuing date when the bond/security is traded to the security buyer.**Maturity:**The maturity date is when the security/bond expires, and the principal amount is paid back to the bondholder.**Rate:**The bond's annual interest rate at which coupon payments are made.**Yld:**The security's annual yield, which is 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 are done per year.

**Basis:**This is an optional integer argument that specifies the financial day counting basis

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

The PRICE Excel function is very simple and easy to use. Let us understand the working of the PRICE Excel function with examples.

### Price in Excel Example #1

Suppose we are given the following data to calculate the price in Excel.

The following screenshot illustrates how the PRICE function Excel prices a bond.

### Things to be Remember while using Excel Price Function

- For Calculation purposes, the Date format in Excel is sequential. So, by default, value 1 stands for January 1, 1900. So the next day, January 2, 1900, would be 2.
- 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 PRICE formula returns the #VALUE! Error value.
- If yld < 0 or if rate < 0 or redemption ≤ 0 PRICE returns the #NUM! Error value.
- If the frequency mentioned in the price formula is any other value apart from 1, 2, or 4, PRICE will return the #NUM! Error value as an 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.

### Recommended Articles

This article is a guide to Price Excel Function. Here, we discuss the PRICE formula, how to use PRICE in Excel, and practical examples and downloadable Excel templates. You may also look at these useful functions in Excel: -

- Free Price Comparison Template
- Calculate Price Elasticity of Supply
- Excel Convert Function
- Examples of Mode Formula in Excel