Its calculates the price per 100 currency units of face value for a security that pays simple interest at maturity (no compounding).
Syntax
PRICEMAT(Settlement; Maturity; Issue; Rate; Yield; [Basis])
Arguments
| Argument | Requirement | Description | Validation Rules |
| Settlement | Required | Trade date | Must be valid date < Maturity |
| maturity | Required | Maturity date | Must be valid date > Settlement |
| issue | Required | Security issuance date | Must be valid date ≤ Settlement |
| rate | Required | Annual coupon rate | ≥ 0 |
| yield | Required | Annual market yield | ≥ 0 |
| [basis] | Optional | Day count convention (0-4) | Default=0 |
Error Conditions
- #VALUE!: Invalid dates
- #NUM!: Negative rates/yields or Basis ∉ {0,1,2,3,4}
Key Features
- Simple Interest Model:
- Interest calculated linearly (no compounding)
- Appropriate for short-term instruments
- Price Components:
- Principal repayment at maturity
- Full-term interest payment
- Discounted at market yield
Calculation Method
Price = [Repayment + (Rate × DIM/YearDays)] / (1 + Yield × DSM/YearDays) – Accrued Interest
Where:
- DIM = Days from issue to maturity
- DSM = Days from settlement to maturity
- YearDays = Days in year per Basis
Example
Important Notes
- Day Count Conventions:
- 0 = US (NASD) 30/360
- 1 = Actual/actual
- 2 = Actual/360
- 3 = Actual/365
- 4 = European 30/360
- Financial Applications:
- Commercial paper
- Short-term notes
- Certificates of deposit
- Complementary Functions:
- ACCRINT(): Calculates accrued interest
- YIELDMAT(): Determines equivalent yield
- Implementation Tip:
For precise institutional calculations:
=ROUND(PRICEMAT(…),2) + ROUND(ACCRINT(…),2)