MS Excel: TBILLPRICE function for treasury bill

When investing in Treasury Bills (T-bills), it's essential to understand how much to pay today for a future return. Since T-bills are zero-coupon securities sold at a discount, the price you pay is always less than their face value.

Excel’s TBILLPRICE function helps investors and analysts quickly determine the current purchase price of a T-bill based on its discount rate and time to maturity.

The TBILLPRICE function calculates the price per $100 face value of a Treasury bill, given the settlement date, maturity date, and annual discount rate.

This makes it easy to estimate what an investor should pay for a T-bill today to receive $100 at maturity.

Syntax

=TBILLPRICE(settlement, maturity, discount)

Parameter Breakdown:

Argument	Description
settlement	The date the T-bill is purchased (settled)
maturity	The date the T-bill matures
discount	The annual discount rate (as a decimal, e.g. 0.025 for 2.5%)

Output: The price per $100 face value, based on a 360-day year convention.

Example: Pricing a Treasury Bill

Scenario: A T-bill is purchased on April 1, 2025, and matures on July 1, 2025 (91 days later). The annual discount rate is 2.5%. What is the current purchase price?

=TBILLPRICE(DATE(2025,4,1), DATE(2025,7,1), 0.025)

Result: $99.37 (approximately)

This means the investor pays $99.37 today to receive $100 on July 1, 2025.

When to Use TBILLPRICE

Use Case	Why It’s Useful
T-bill trading or investing	Determine how much to pay for a return
Portfolio valuation	Update market values based on current discount rates
Short-term cash management	Evaluate secure, short-term investment opportunities
Bond yield comparisons	Compare T-bill returns with other instruments

How It Works Behind the Scenes

The formula behind the TBILLPRICE calculation:

Price = 100 × (1 - discount × DSM/360)

Where:

• DSM = Days between settlement and maturity

• Discount = Annualized discount rate

In our example:

= 100 × (1 - 0.025 × 91 / 360) = 100 × (1 - 0.006319) ≈ $99.37

Related Functions

Function	Description
TBILLYIELD	Calculates the yield for a given T-bill price
TBILLEQ	Returns the bond-equivalent yield
PRICE	Calculates price for coupon-paying bonds
DISC	Returns discount rate for discounted securities

Use TBILLPRICE when you're starting with a known discount rate and need to find the actual price to pay today.

Tips and Common Errors

Tip	Why It Helps
Use DATE() function for clarity	Prevents errors from text-based dates
Check for ≤ 1-year maturity	T-bills are short-term instruments (Excel enforces this)
Use decimals for discount	2.5% → enter as 0.025
Settlement must be before maturity	Otherwise, Excel will return a #NUM! error

Best Practice: Always validate dates using Excel formulas like =ISNUMBER(A1) when pulling data from external sources.

Summary Table

Feature	Value
Function Name	TBILLPRICE
Purpose	Calculate the current price of a T-bill
Best For	Investors, analysts, and cash managers
Inputs Required	Settlement date, maturity date, discount rate
Output	Price per $100 face value
Based On	360-day year convention

Final Thoughts

The TBILLPRICE function is a simple yet powerful tool for understanding the real cost of short-term U.S. government securities. It bridges the gap between discount rate conventions and practical investment analysis.

Whether you're a:

• Financial analyst pricing short-term government debt,

• Investor building a low-risk portfolio,

• Cash manager comparing short-term instruments,

…this function helps ensure clarity and accuracy in your pricing decisions.

Combine TBILLPRICE with TBILLYIELD, TBILLEQ, and dynamic Excel dashboards to track and visualize your T-bill investments.