# How to use the TBILLPRICE function in Excel In this article, we will learn How to use the TBILLPRICE function in Excel.

What is the Treasury Bill (T-bill)? And how to find t bill price?

When the government is going to the financial market to raise money, it can do it by issuing two types of debt methods, one is treasury bills and other is government bonds. The difference between the two is Treasury bills are issued when the government needs money for a shorter period while bonds are issued when it needs debt for more than say five years. Price of Treasury bill is calculated using the below formula

Price (t-bill) = 100 x (1 - (discount x DSM] / 360)

Here DSM is the number of days from settlement to maturity. Treasury bills are generally known as T-bills and have a maximum maturity of less than one year (364 days). Hence, they are categorized as money market methods. As a simple example, say you want to buy a \$1,000 Treasury bill with 180 days to maturity and discount rate 1.5%. To calculate the price, take 180 days and multiply by 1.5 to get 270. Then, divide by 360 to get 0.75, and subtract 100 minus 0.75. The answer is 99.25.  Learn more about how to calculate the price of the T - bills price value per \$100 par value using the TBILLPRICE function in Excel.

TBILLPRICE function in Excel

TBILLPRICE function returns the price per \$100 face value for a Treasury bill. It takes the settlement date and maturity date as argument dates along with the discount rate.

TBILLPRICE function syntax:

 =TBILLPRICE (settlement, maturity, discount)

settlement : settlement date of bill

maturity : maturity date of bill

discount : discount rate on bill

Example :

All of these might be confusing to understand. Let's understand this function using an example. Here we have a settlement date, maturity date and discount rate for the treasury bill.

Use the formula:

 =TBILLPRICE(A2,A3,A4) As you can see in the above image, the price on the t-bill comes out to be 94.94 per \$100 par value. Whereas the Price function returns the price per \$100 face value of a security which comes out to be \$ 99.06 as shown below. As you can see the PRICE formula in the formula box having other arguments mentioned directly in the formula. There are two more T bill functions in Excel TBILLYIELD and TBILLEQ function. Use these function when operating with treasury bill financial values.

Here are some observational notes using the TBILLPRICE function shown below.

Notes :

1. Excel stores dates as serial numbers and is used in calculation by the function. So it’s recommended to use dates as cell reference instead of giving direct argument to the function. Check the date values if the function returns #VALUE! Error.
2. The security settlement date is the date after the issue date when the security is traded to the buyer.
3. Arguments like settlement date & maturity date are truncated to integers.
4. The function returns the #VALUE! Error if the settlement date & maturity date is not a valid date format.
5. The function returns the #NUM! Error if:
1. If maturity date settlement value.
2. If discount rate argument is < 0

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