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The Excel PV Function: Rate Nper (PMT) (PMT) (FV) (FV) Nper (FV) (Type) (Type)

The Excel PV function calculates the present value of an investment based on future payments over a specified number of periods using a given interest rate. It takes in arguments for the interest rate, number of periods, payment amount, future value, and whether payments are made at the start or end of each period, with defaults if any arguments are omitted. Cash flows are represented with negative numbers for outgoing payments and positive numbers for incoming payments.

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50 views

The Excel PV Function: Rate Nper (PMT) (PMT) (FV) (FV) Nper (FV) (Type) (Type)

The Excel PV function calculates the present value of an investment based on future payments over a specified number of periods using a given interest rate. It takes in arguments for the interest rate, number of periods, payment amount, future value, and whether payments are made at the start or end of each period, with defaults if any arguments are omitted. Cash flows are represented with negative numbers for outgoing payments and positive numbers for incoming payments.

Uploaded by

saurabh449
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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The Excel PV Function

The Excel PV function calculates the Present Value of an investment, based on a series of future
payments.
The syntax of the function is:
PV( rate, nper, [pmt], [fv], [type] )
Where the arguments are as follows:

rate - The interest rate, per period.

nper - The number of periods for the lifetime of the annuity or investment.

[pmt] - An optional argument that specifies the payment per period.


If the [pmt] argument is omitted, the [fv] argument must be supplied.

[fv] - An optional argument that specifies the future value of the annuity, at the
end of nper payments.
If the [fv] argument is omitted, it takes on the default value 0.

[type] - An optional argument that defines whether the payment is made at the start
or the end of the period.
The [type] argument can have the value 0 or 1, meaning:
0 - the payment is made at the end of the period;
1 - the payment is made at the start of the period.
If the [type] argument is omitted, it takes on the default value of 0
(denoting payments made at the end of the period).

Cash Flow Convention:


Note that, in line with the general cash flow convention, outgoing payments are represented by
negative numbers and incoming payments are represented by positive numbers. This is seen in
the examples below.

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