How To Use Excel Pv Function
We use the excel pv function to get the present value of an investment.
How to use excel pv function. Pv function in excel. Pv formula in excel. When calculating the present value three assumptions are made. The pv function can also be used in vba code in microsoft excel. When the above formula is applied to a set of data it will return the present value.
A loan with a 12 annual interest rate and monthly required payments would have a monthly interest rate of 12 12 or 1. The excel pv function is a financial function that returns the present value of an investment. The microsoft excel pv function returns the present value of an investment based on an interest rate and a constant payment schedule. By this we can calculate the amount of loan required to purchase anything or the present value of the asset when we have taken the loan. How to use the pv function in excel.
Let s look at some excel pv function examples and explore how to use the pv function in excel vba code. 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. Dim lvalue as currency lvalue pv 0 0525 1 10 1 100 0 in this example the variable called lvalue would now contain the value of 762 88. You can use the pv function to get the value in today s dollars of a series of future payments assuming periodic constant payments and a constant interest rate. Pv in excel function example 2 suppose you make quarterly payments of rs 1 25 000 per period for five years having an interest rate per annum of 7.
The pv function uses the following arguments. The interest rate per period will be counted as 7 4 12 quarterly. This is a complete financial formula which will not be seen in any operation calculations. The present value is the value in today s dollars of a series of payments to be made in future. Notice how the formula inputs appear.
Pv function overview the pv function calculates the present value. At the same time you ll learn how to use the pv function in a formula. The pv function excel will be given as rate 7 4 12 nper 4 5 pmt 125000. Pv formula or present value formula in excel is used for calculating the present value of any loan amount. Therefore the rate would be 1.