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Tag: PV function

PV function: Description, Usage, Syntax, Examples and Explanation

What is PV function in Excel? PV function is one of  the Financial functions in Microsoft Excel that calculates the present value of a loan or an investment, based on a constant interest rate. 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. Use the…

Bond valuation example in Excel

This tutorial show how to calculate the value of a bond on the issue date using the PV function. Explanation In the example shown, the formula in C10 is: =-PV(C6/C8,C7*C8,C5/C8*C4,C4) Note: This example assumes that today is the issue date, so the next payment will occur in exactly six months. See note below on finding the value of a bond on…

How to calculate present value of annuity in excel

To get the present value of an annuity, you can use the PV function. Formula =PV(rate,periods,payment,0,0) In the example shown, the formula in C9 is: =PV(C5,C6,C4,0,0) Explanation An annuity is a series of equal cash flows, spaced equally in time. In this example, an annuity pays 10,000 per year for the next 25 years, with an interest rate (discount rate)…

Calculate original loan amount in Excel

To calculate the original loan amount, given the loan term, the interest rate, and a periodic payment amount, you can use the PV function. Formula =PV(rate,periods,-payment) Explanation In the example shown, the formula in C10 is… =PV(C5/12,C7,C6) How this formula works Loans have four primary components: the amount, the interest rate, the number of periodic payments (the loan term) and…

PMT, RATE, NPER, PV and FV Financial Functions in Excel

Learn all about Excel’s PMT, RATE, NPER, PV and FV To illustrate Excel’s most popular financial functions, we consider a loan with monthly payments, an annual interest rate of 6%, a 20-year duration, a present value of $150,000 (amount borrowed) and a future value of 0 (that’s what you hope to achieve when you pay off a loan). We make monthly payments, so we use 6%/12 =…