The PRICEDISC function in Google Sheets is a valuable tool for financial analysts and investors. It calculates the price of a discount security, essentially a note issued without interest that matures at a specific value. By assessing the expected yield, this function allows users to evaluate the viability and profitability of such investments effectively.

Syntax

PRICEDISC(settlement, maturity, disc, redemption)

• settlement: The date when the security is purchased.
• maturity: The date when the security will mature.
• disc: The discount rate (in percentage) at which the security is sold.
• redemption: The value at which the security will be redeemed upon maturity.

Example #1

=PRICEDISC("2023-01-01", "2024-01-01", 0.05, 1000)

This function calculates the price of a discount security purchased on January 1, 2023, maturing on January 1, 2024, at a discount rate of 5% with a redemption value of $1,000. The result is approximately $952.38.

Example #2

=PRICEDISC("2023-06-01", "2026-06-01", 0.04, 5000)

This example calculates the price for a security bought on June 1, 2023, that matures on June 1, 2026, with a discount rate of 4% and a redemption value of $5,000. The estimated price would be about $4,306.14.

Example #3

=PRICEDISC("2022-01-01", "2023-01-01", 0.03, 2000)

Here, the function computes the price of a discount security purchased on January 1, 2022, maturing on January 1, 2023, with a 3% discount rate and a redemption amount of $2,000. This yields a price of approximately $1,941.75.

Error handling

• VALUE!: This error occurs if the input includes non-date values for settlement or maturity.
• NUM!: The error indicates that an invalid number was used, often due to a discount rate or redemption value being outside acceptable limits.
• REF!: This error is returned when a referenced cell is broken or not valid.

Conclusion

The PRICEDISC function is a powerful feature in Google Sheets that aids in financial decision-making by allowing investors to determine the price of discount securities. By leveraging this function, users can analyze different scenarios efficiently, ensuring informed and strategic investment choices.