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Spreadsheet Mathematical Functions

Function Wizard Functions

PV

Description: Based on an investment, returns the present value. The present value is the total amount that a series of future payments is worth now. For example, when you borrow money, the loan amount is the present value to the lender.

Syntax: PV(Rate, Nper, Pmt, [Fv], [Type])

Set Type equal to If payments are due
0 or omitted At the end of the period
1 At the beginning of the period

Remarks:

Example:

PV(.08/12, 12*20, 500, 0, 0) = -59,777.15

The result is negative because it represents money that you would pay, an outgoing cash flow. If you are asked to pay (60,000) for the annuity, you would determine this would not be a good investment because the present value of the annuity (59,777.15) is less than what you are asked to pay.

 

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