Documentation/How Tos/Calc: PRICEMAT function
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PRICEMAT
Calculates a price (per 100 currency units par value) for a bond that pays interest on maturity.
Syntax:
PRICEMAT(settlementdate; maturitydate; issuedate; rate; yield; basis)
- settlementdate: the settlement (purchase) date of the bond.
- maturitydate: the maturity (redemption) date of the bond.
- issuedate: the original issue date of the bond.
- rate: the (annual) interest rate of the bond (interest only paid at maturity).
- yield: the (annual) yield of the bond.
- basis: is the calendar system to use. Defaults to 0 if omitted.
- 0 - US method (NASD), 12 months of 30 days each
- 1 - Actual number of days in months, actual number of days in year
- 2 - Actual number of days in month, year has 360 days
- 3 - Actual number of days in month, year has 365 days
- 4 - European method, 12 months of 30 days each
- This function calculates a price (or value), per 100 currency units par value, for a bond which pays interest just once, at maturity.
- PRICEMAT returns:
- present_value_of_redemptionvalue_and_interest - accrued_interest
- where present value is calculated on a non-compounding basis.
Example:
PRICEMAT("2007-02-15"; "2007-04-06"; "2007-01-06"; 5%; 6%; 0)
- returns approximately 99.85. You purchase and settle a bond on 15 February 2007; the (90 day) bond was issued on 6th January 2007 and will mature on 6th April 2007, yielding its face value of $1000 and an interest payment of $1000 * 5%*90/360. Choosing a yield of 6% per annum, the value of the bond on 15 February 2007 is $998.50 using the basis 0 date system.
Issues:
- There are (rare) circumstances when the results from Calc and Excel differ.
- The formula uses takes no account of the compounding of interest. If you are using this function to calculate a bond value, and the time from issue to maturity is over a year, choose your required yield with appropriate care.
- The price is calculated as at the date of settlement (when the money changes hands). The contract to buy the bond may predate that (for example by 3 days).
See Also