How To Use Excel Pv Function

The excel pv function is a financial function that returns the present value of an investment.

How to use excel pv function. The pv function excel will be given as rate 7 4 12 nper 4 5 pmt 125000. 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. Use the excel formula coach to find the present value loan amount you can afford based on a set monthly payment. Pv formula in excel. 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.

The microsoft excel pv function returns the present value of an investment based on an interest rate and a constant payment schedule. When the above formula is applied to a set of data it will return the present value. This is a complete financial formula which will not be seen in any operation calculations. Pv formula or present value formula in excel is used for calculating the present value of any loan amount. 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.

Rate required argument the interest rate per compounding period. A loan with a 12 annual interest rate and monthly required payments would have a monthly interest rate of 12 12 or 1. The present value is the value in today s dollars of a series of payments to be made in future. Pv function in excel table of contents pv function in excel. The pv function uses the following arguments.

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. We use the excel pv function to get the present value of an investment. Let s look at some excel pv function examples and explore how to use the pv function in excel vba code. 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. At the same time you ll learn how to use the pv function in a formula.

To use the pv excel worksheet function select a cell and type. The pv function can also be used in vba code in microsoft excel. The interest rate per period will be counted as 7 4 12 quarterly. When calculating the present value three assumptions are made. Therefore the rate would be 1.