Excel > Functions

PV Function

The Excel PV function is used to return the present value of an investment based on a constant interest rate and payments.

The syntax for the PV function is:

=PV(rate, nper, pmt, [fv], [type])

Argument

Purpose

rate

The interest rate per period of the investment

nper

The number of payments for the investment

pmt

The payment made each period

fv

The future value, or total remaining after the last payment has been made.

This argument is optional, and if omitted the total is assumed to be 0

type

When the payments are due. It can be entered as 1 or 0 and is optional. If omitted the value is assumed to be 0

  • 0 - Payments are made at the end of the period
  • 1 - Payments are made at the beginning of the period

The examples below show the PV function being used to return the present value dependent upon different parameters.

Using the PV function

Function

Result

=PV(C4/12,B4*12,A4)

£10,100

Present value returned on an investment paid in £200 monthly payments for 5 years. Payments are made at the end of each period

=PV(C4/12,B4*12,A4,,1)

£10,159

Present value returned on an investment paid in £200 monthly payments for 5 years. Payments are made at the beginning of each period

=PV(C4/52,B4*52,A4)

£43,850

Present value returned on an investment paid in £200 weekly payments for 5 years. Payments are made at the end of each period

Follow us on

Facebook  Twitter  You Tube 

Other Financial Functions

Excel 2010 Superhero Course