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PRICE

The PRICE function in Google Sheets calculates the price of a security paying periodic interest, such as a US Treasury Bond, based on the expected yield. This function is commonly used in financial analysis and investment decisions.

Function Syntax and Parameters

Syntax: PRICE(settlement, maturity, rate, yield, redemption, frequency, [day_count_convention])

Parameters:

  • settlement: The settlement date of the security.
  • maturity: The maturity date of the security.
  • rate: The annual interest rate of the security.
  • yield: The expected yield of the security.
  • redemption: The redemption (or face) value of the security.
  • frequency: The number of interest payments per year.
  • day_count_convention (optional): The way the year is calculated. Default is 0.

Step-by-Step Tutorial

  1. Using PRICE function to calculate security price:
    • Example: =PRICE("01/01/2022", "12/31/2025", 4.5%, 5%, $1000, 2, 0)
    • Result: The function will return the price of the security based on the provided parameters.

Use Cases and Scenarios

  1. Investment Analysis: Calculate the price of bonds, treasury bills, or other securities.
  2. Portfolio Management: Evaluate the value of different financial instruments in a portfolio.
  3. Risk Assessment: Analyze the impact of changes in yield or interest rates on security prices.
  4. Comparative Analysis: Compare the prices of similar securities with different yields or redemption values.

Related Functions

  • YIELD: Calculates the yield of a security that pays periodic interest.

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