Join Curt Frye for an in-depth discussion in this video PRICEDISC: Calculating the price of a discounted security, part of Excel 2010: Financial Functions in Depth.
When you evaluate a bond, either one that you're creating or one that you want to…buy, you need to evaluate its price.…If you know the start and end date the interest you'll pay and the redemption…value, you can use the PRICEDISC function to calculate the bonds price.…The information you need to know appears here in the sample workbook and cell…C3 is the settlement date and that is the date that you take possession of the bond.…Then the maturity date, that's the last date of the bonds life.…That is the day it matures.…
Then the discount rate and that is the interest rate applied to the investment.…Then we have the redemption value and that's usually set to $100, but in this…case there is no default value so we set it to 100. And then in cell C7 we have basis.…The basis is how you count the days in a month and a year.…So in this case we have option number 1 and that is actual.…That means that you count the actual number of days instead of using some…sort of an abstraction.…So in a non-leap year you will have 365 days which include 28 days in February,…
- Analyzing loans, payments, and interest
- Discovering the interest rate of an annuity
- Determining depreciation using the straight line, declining balance, double-declining balance, and other methods
- Calculating the future value of an investment with variable returns
- Finding the discount rate of a security
- Converting between fractional prices and decimal prices
- Determining the yield of securities that pay interest periodically
Skill Level Intermediate
Q: Where can I learn more about Excel formulas?
A: Discover more on this topic by visiting Excel formulas on lynda.com.
Managing and Analyzing Data in Excel 2010with Dennis Taylor1h 32m Appropriate for all
1. Analyzing Loans, Payments, and Interest
2. Calculating Depreciation
3. Determining Values and Rates of Return
4. Calculating Bond Coupon Dates and Security Durations
5. Calculating Security Prices and Yields
6. Calculating Prices and Yields of Securities with Odd Periods
Additional resources1m 5s
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