Formulas > =PRICE()

How To Use PRICE() Function in Google Sheets


Calculates the price of a security paying periodic interest, such as a US Treasury Bond, based on expected yield.

Common Questions about the PRICE Formula
• What does the PRICE Formula do?
• How does the PRICE Formula work?
• What types of data can be used with the PRICE Formula?

How Can the PRICE Formula be Used Appropriately?
• Comparing the value of investment securities
• Calculating the fair value of an entity’s stock
• Calculating the optimal price for a product or service
• Determining the interest rate component of a debt instrument

How Can the PRICE Formula be Commonly Mistyped?
• Incorrectly entering the number of days as a fraction
• Incorrectly entering the annual rate for the risk-free security
• Using incorrect notation for the format of the resulting PRICE value
• Also mistyped as PRCE, PRIE, PRIC.

What Are Some Common Ways the PRICE Formula is Used Inappropriately?
• Using the wrong type of data for the PRICE Formula
• Inputting discount rates incorrectly
• Using the PRICE Formula to calculate investment returns

What Are Some Common Pitfalls When Using the PRICE Formula?
• Using a specific formulaic calculation for an investment decision rather than considering a variety of factors
• Not taking into consideration a security’s market volatility
• Not utilizing a terminal value when considering the price of an investment

What Are Common Mistakes When Using the PRICE Formula?
• enter the parameters in the incorrect order
• fail to subtract coupon payments from the security's current market price
• forgetting to multiply a security's yield by the number of days until maturity

What Are Common Misconceptions People Might Have With the PRICE Formula?
• The PRICE Formula only applies to stocks and not other investment vehicles
• The risk-free rate is the same for all securities
• The PRICE formula values only perfect information

How To Actually Use PRICE() in Sheets

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

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