Instructions For Using Excel Power
Instructions For Using Excel Power
1, Power Function
POWER (number, power)
The POWER function syntax has the following arguments:
Number Required. The base number. It can be any real number.
Power Required. The exponent to which the base number is raised.
Example 1.06^10=1.7908477
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2, PV Function
PV calculates the present value of a loan or an investment, based on a constant interest rate.
Application: You can use PV with either periodic, constant payments (such as a mortgage or other loan), or a future value that's your
investment goal.
Rate Required. The interest rate per period. For example, if you obtain an automobile loan at a 10 percent annual interest rate and make
monthly payments, your interest rate per month is 10%/12, or 0.83%.
Nper Required. The total number of payment periods in an annuity. For example, if you get a four-year car loan and make monthly payments,
your loan has 4*12 (or 48) periods. You would enter 48 into the formula for nper.
Pmt Required. The payment made each period and cannot change over the life of the annuity. Typically, pmt includes principal and interest
but no other fees or taxes. For example, the monthly payments on a $10,000, four-year car loan at 12 percent are $263.33. You would enter -
263.33 into the formula as the pmt. If pmt is omitted, you must include the fv argument.
Fv Optional. The future value, or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (the
future value of a loan, for example, is 0). For example, if you want to save $50,000 to pay for a special project in 18 years, then $50,000 is the
future value. You could then make a conservative guess at an interest rate and determine how much you must save each month. If fv is
omitted, you must include the pmt argument.
Type Optional. The number 0 or 1 and indicates when payments are due.
Example
A project is expected to gain annual profit $20 million in the future 10 years. Please calculate the total present value of the expected profit. The
yearly interest rate is 5%.
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3, FV Function
FV calculates the future value of an investment based on a constant interest rate.
Application: You can use FV with either periodic, constant payments, or a single lump sum payment.
FV(rate,nper,pmt,[pv],[type])
The FV function syntax has the following arguments:
Rate Required. The interest rate per period (year or month).
Nper Required. The total number of payment periods in an annuity.
Pmt Required. The payment made each period; it cannot change over the life of the annuity. Typically, pmt contains principal and interest but
no other fees or taxes. If pmt is omitted, you must include the pv argument.
Pv Optional. The present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to
be 0 (zero), and you must include the pmt argument.
Type Optional. The number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.
Example