Excel PV function

Function: PV

Description: Excel PV function, one of the financial functions, 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.

The syntax for the PV function is as follows:

Syntax: PV(rate, nper, pmt, [fv], [type])

Where:

• rate: The interest rate per period.
• nper: The total number of periods over which the investment is made.
• pmt: The periodic payment made each period. This value can be negative or positive, depending on whether the payment is an inflow or outflow of cash.
• [fv]: Optional. The future value, or the balance remaining after the final payment is made. If this value is not specified, it is assumed to be 0 (zero).
• [type]: Optional. A logical value that indicates when the payments are due. If this value is omitted or set to 0 (zero), payments are due at the end of the period. If this value is set to 1, payments are due at the beginning of the period.

Examples:

To calculate the present value of an investment that will pay $100 per year for 10 years at an annual interest rate of 6%, you can use the following formula:

=PV(6%/1, 10, -100, 0, 0)