PRICEDISC Function is a finance function in Google Sheets. This function is used to find the price of a discounted security on the basis of a future return.

PRICEDISC function is normally used in financial modelling and future analysis of the business. In some situations, the corporates are not willing to sell shares to borrow money because of the disadvantages like the obligation to divide payment, its repayment from after-tax profit etc.

In those situations, they may issue Securities or Bonds. So the PRICEDISC function is used to calculate the price of the security per $ 100 face value of a discounted security which is a non-interest-bearing but interest is implied in the face value of the bond.

Syntax

PRICEDISC(settlement, maturity, discount, redemption, [day_count_convention])

Compulsory Parameters

Settlement: It means the date of the settlement. It was the date after the issue date of the security when it is delivered to the buyer.

Maturity: It is the end date or when the security is expires

Discount: It is the discount rate of the security

Redemption: It is the redemption value of the security

Day_Count_Convention: This integer value indicated the method of the financial day counting

0 – indicates that 30 days in the month and 360 days in a year. There are some specific adjustments to the dates entered at the end of the month. This may be the default value –US (NASD) 30/360
1- This is another day count convention. This calculates based on the actual number of days between the specified dates, and the number of days in the intervening years.
2- indicates that the calculation is based on the actual number of days between specified dates, assuming 360 days a year.
3- indicates that the calculation is based on the actual number of days between specified dates, assuming 365 days a year.
4- indicates European 30/360, similar to the first option (0). This calculates as per a 30-day month and a 360-day year, but it adjusts month-end dates as per European financial conventions.

How to use PRICEDISC Function in Google sheet

Now we know the syntax, and the compulsory and optional parameters to calculate the PRICEDISC Function in Google sheet.

Let us consider an example to understand the application in google Sheets.

Suppose the security was purchased on 1st October 2018 and the maturity date of the security will be on 30th September 2023. The rate of discount is 3% and the redemption value is $ 100. The day count convention is based on the 30/360, it is the US(NASD)

First, we can arrange the data in a table as shown below

Once we enter the formula

=PRICEDISC(C3,C4,C5,C6,C7),

then the table will show the result as given below

From this example, based on the conditions, $ 85 is the security price.

Day_count_convention is mentioned as zero because the example provided it as US (NASD) 30/360. This value may change based on the day_count_convention provided in the question.

Dates like settlement and maturity must be provided by using a date parsing function like ‘Date’, ‘To_date’ etc.

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Common Errors While applying PRICEDISC Finance Function

#VALUE! Error

The result of the PRICEDISC Financial function may give an error message #VALUE! in case if :

The date provided for ‘Settlement’ or Maturity is invalid or
The provided parameter is a non-numeric

Please refer to the below Table as an example

Wrong Date Format Non-Numeric Value

#NUM! Error

The result of the PRICEDISC Financial function may give an error message #NUM! in case if :

There is any logical error in the dates like the Settlement date is greater than the Maturity date or
There is a non-numerical value or invalid number for parameters like Rate, Discount, Redemption or Day_Count_Convention.