Description
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:
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.
Excel Pv Function Examples
The spreadsheets below show examples of the Excel Pv function. In each case, the format of the function is shown in the spreadsheet on the left and the result is shown in the spreadsheet on the right.
Example 1
The following spreadsheet shows the Excel Pv function used to calculate the present value of an annuity that pays $1,000 per month for a period of 5 years. The interest is 5% per year and each payment is made at the end of the month.
Example 2
The example below shows the Excel Pv function used to calculate the present value of an annuity that pays $2,000 per quarter for a period of 4 years. The interest is 10% per year and each payment is made at the start of the quarter.
Pv Function Errors.
If you get an error from the Excel Pv Function, this is most likely to be the #VALUE error:
Common Errors
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