Introduction to the PV function in Excel

The PV function of Excel returns the present value of the investment. The present value is the cumulative and current value of a series of future payments. For example, the borrowed borrowed of the borrower is the present value of the loan of the lending party.

Grammar

PV (Rate,nper,pmt,fv,type)

Rate is the interest rate for each period. For example, if you borrow a loan to buy a car at a 12% annual rate and repay the loan on a monthly basis, the monthly interest rate is 12%/12 (ie, 1%). You can enter 12%/12, 1%, or 0.01 as the rate value in the formula.

NPer is the total investment (or loan) period, that is, the total payment period for the investment (or loan). For example, for a 5-year monthly car loan, there is a total of 5*12 (or 60) reimbursement periods. You can enter 60 as the value of the nper in the formula.

The amount that PMT should pay for each period, and its value remains unchanged throughout the annuity period. Usually PMT includes principal and interest, but excludes other fees and taxes. For example, the monthly repayment of $10,000 's four-year car loan with an annual interest rate of 12% per cent is $263.33. You can enter 263.33 as the value of PMT in the formula. If PMT is omitted, the FV parameter must be included.

FV is the future value, or the cash balance that is expected after the last payment, if FV is omitted, the value is assumed to be 0 (the future value of a loan is 0). For example, if you need to pay $60,000 after 12 years, then $60,000 is the future value. A monthly deposit can be determined based on a conservative estimate of the interest rate. If FV is omitted, the PMT parameter must be included.

Type number 0 or 1 to specify whether the payment time for each period is at the beginning or the end of the period. 0 or omitted to represent the end of the term, 1 represents the beginning of the period.

Description

You should confirm the consistency of the specified rate and nper units. For example, the same four-year annuity interest rate of 12% loans, if the monthly payment, rate should be 12%/12,nper should be 4*12, if the annual payment, rate should be 12%,nper 4.

The following functions apply to an annuity:

CUMIPMT, PPMT, Cumprinc, PV, FV, RATE, Fvschedule, XIRR, IPMT, XNPV, PMT

An annuity is a series of fixed cash payments over a continuous period of time. For example, a car loan or a mortgage is an annuity. For more information, see the detailed description of each annuity function.

In an annuity function, an expense, such as a bank deposit, is expressed as a negative number, and income, such as a dividend income, is expressed as a positive number. For example, for depositors, $1000 bank deposits can be expressed as parameter-1,000, whereas for banks this parameter is 1,000.

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• Excel Tutorials