# How to use the TBILLPRICE function

**What is the TBILLPRICE function?**

The TBILLPRICE function calculates the par amount (face value) for a Treasury bill.

## 1. Introduction

**What is the par amount or face value of a treasury bill?**

The par amount or face value of a treasury bill is the amount the bill will be redeemed for at maturity, typically in denominations of $1,000 up to $5 million for institutional investors.

For example, a $1,000 par value T-bill will pay $1,000 at maturity.

**What is a treasury bill?**

A treasury bill, or T-bill, is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of 1 year or less that is sold at a discount from par in regular auctions.

**Excel functions for bonds and treasury bills**

Function |
Description |

TBILLEQ |
Returns the bond-equivalent yield for a Treasury bill |

TBILLPRICE |
Returns the price per $100 face value for a Treasury bill |

TBILLYIELD | Returns the yield for a Treasury bill |

ACCRINT | Returns the accrued interest for a security that pays periodic interest |

ACCRINTM | Returns the accrued interest for a security that pays interest at maturity |

DURATION | Returns the annual duration of a security with periodic interest payments |

MDURATION | Returns the Macauley modified duration for a security with an assumed par value of $100 |

DISC | Returns the discount rate for a security |

INTRATE | Returns the interest rate for a fully invested security |

**How is the TBILLPRICE function calculated?**

Calculation formula: TBILLPRICE = 100 * (1-(discount*DSM/360))

DSM = days between settlement to maturity ignoring maturity date that is more than a year after settlement.

## 2. Syntax

TBILLPRICE(*settlement*, *maturity*, *discount*)

settlement |
Required. The Treasury bill's settlement date which is the date after the issue date. |

maturity |
Required. The date when the security expires. |

discount |
Required. The Treasury bill's discount rate. |

**What is the Treasury bill's settlement date?**

The date after the issue date. A Treasury bill's settlement date is the date 1 business day after the auction when payment must be received and the bill is delivered to the buyer's account in exchange for the purchase price.

**What is the Treasury bill's maturity?**

The maturity date of a Treasury bill is the date when the bill's term expires, typically in 4, 8, 13, 26, or 52 weeks, and the Treasury repays the par value to the investor.

**What is the Treasury bill's discount rate?**

The Treasury bill discount rate is the interest rate used to determine how much less than par the investor will pay at auction for a given bill based on its par value and term to maturity.

Treasury bills are issued at a discount from the face value, the interest paid is the face value - purchase price.

## 3. Example 1

**Calculate the par amount of a Treasury bill with a settlement date of 05/15/2024, a maturity date of 08/15/2024, and a discount rate of 5.5%?**

The TBILLPRICE function has the following arguments:

- settlement: 05/15/2024 The settlement date for the Treasury bill.
- maturity: 08/15/2024 The maturity date for the Treasury bill.
- discount: 5.5% (0.055) The discount rate for the Treasury bill.

Formula in cell C6:

The formula in cell C6 returns 98.59 which represents the par amount for a given Treasury bill. The TBILLPRICE function is calculated like this:

TBILLPRICE = 100*(1-discount*DSM/360)

DSM = days between *settlement* to *maturity* ignoring *maturity* date that is more than a year after *settlement*.

Lets plug the arguments in to this math formula:

DSM = 8/15/2024 - 5/15/2024 = 92 days

100*(1-0.055*92/360) = 98.5944444444444

$98.59 matches the value in cell C6.

## 4. Example 2

*Calculate the par amount of a Treasury bill with a settlement date of **07/01/2024 that matures on 120 days later with a discount rate of 2.8%?*

This example demonstrates how to enter Excel dates in the TBILLPRICE function.

The TBILLPRICE function has the following arguments:

- settlement: 7/1/2024 The settlement date for the Treasury bill.
- maturity: 10/29/2024 The maturity date for the Treasury bill.
- discount: 2.8% (0.028) The discount rate for the Treasury bill.

Formula in cell C6:

The formula in cell C6 returns 99.07 which represents the par amount for a given Treasury bill. The DATE function lets you calculate an Excel date based on year, month, and day. Excel dates are different than regular dates, they are whole numbers from 1 to n. For example 1/1/1900 is 1. 1/2/1900 is 2 etc. This makes it easy for Excel to manipulate Excel dates like adding subtracting etc.

DATE(2024,7,1)+120 calculates the Excel date for 7/1/2024 which is 45474. Then add 120 days as given in the question to calculate the maturity date. This returns 45594 which corresponds to date 10/29/2024.

The TBILLPRICE function is calculated like this: TBILLPRICE = 100*(1-discount*DSM/360)

DSM = days between *settlement* to *maturity* ignoring *maturity* date that is more than a year after *settlement*.

Lets plug the arguments in to this math formula:

DSM = 7/1/2024 - 10/29/2024 = 120 days

100*(1-0.028*120/360) = 99.0666666666667

$99.07 is the same value as the result in cell C6.

## 5. Example 3

*Calculate the par amount of a Treasury bill with a settlement date of **11/01/2024, matures on 02/01/2025, and the discount rate is 4.2%?*

The TBILLPRICE function has the following arguments:

- settlement: 11/1/2024 The settlement date for the Treasury bill.
- maturity: 2/1/2025 The maturity date for the Treasury bill.
- discount: 4.2% (0.042) The discount rate for the Treasury bill.

Formula in cell C6:

The formula in cell C6 returns 98.93 which represents the par amount for a given Treasury bill. The TBILLPRICE function is calculated like this: TBILLPRICE = 100*(1-discount*DSM/360)

DSM = days between *settlement* to *maturity* ignoring *maturity* date that is more than a year after *settlement*.

Lets plug the arguments in to this math formula:

DSM = 11/1/2024 - 2/1/2025 = 92 days

100*(1-0.042*92/360) = 98.9266666666667

$98.93 is the same value as the result in cell C6.

## 6. Why is the function not working?

The TBILLPRICE function returns:

- #VALUE! error if
*settlement*or*maturity*is not a valid data type. - #NUM! error if
*discount*<=0 (zero)*settlement*>*maturity*, or if*maturity*is more than a year after the*settlement*

### Functions in 'Financial' category

The TBILLPRICE function function is one of 27 functions in the 'Financial' category.

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