Manuals/calci/PV

PV (Rate,NoPaymentPeriods,Payment,FutureValue,Type)

• $Rate$ is the interest rate.
• $NoPaymentPeriods$ is the total number of payment periods.
• $Payment$ is the amount of the payment made each period.
• $FutureValue$ is the future value.
• $Type$ is the type.
  • PV(), returns the present value of an investment.

Description

• This function gives the present value for an investment.
• It is based on an interest rate and a constant payment schedule.
• This function calculates the present value of an investment, which is the total amount that a series of future payments is worth presently.
• In $PV(Rate,NoPaymentPeriods,Payment,FutureValue,Type)$,$Rate$ is the rate of interest for the period.
• Suppose we are taking a loan for 8 percent annual interest rate and paying the amount in monthly, then the $Rate$ value is 8%/12.
• So we have to enter the Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle Rate} value as 8%/12 or 0.6667% or 0.006667 in to the formula as the rate.
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle NoPaymentPeriods} is the total number of payment periods in an annuity.
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle Payment} is the payment made each period in the annuity.
• Normally, the payment is set over the life of the annuity and includes principal plus interest without any other fees.
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle FutureValue} is the future value of an investment or loan (the value you want to achieve at the end of all periods) when we are omitting the value of Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle FutureValue} ,then it is assumed to be 0.
• Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle Type} is the number 0 or 1 which is specifies the time to make a payment during the period.
• when we are not giving the value of Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle Type} , then it is assumed to be 0.

Type value	Explanation
0	Payments are due at the end of the period
1	Payments are due at the beginning of the period

• The present value can be calculated using the following formula:

Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle PV=\frac{FV*1}{(1+r)^n}}

• where Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle FV} is the future value, Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle r} is the rate of interest, Failed to parse (MathML with SVG or PNG fallback (recommended for modern browsers and accessibility tools): Invalid response ("Math extension cannot connect to Restbase.") from server "https://wikimedia.org/api/rest_v1/":): {\displaystyle n} is the number of periods.
• Also the result is coming in a negative sign ,it is indicating the money that we would pay, an outgoing cash flow.
• The interest rate is dividing by 12 to get a monthly rate.
• The years the money is paid out is multiplied by 12 to get the number of payments.

Examples

1. =PV(9.2%/12,15*12,10000,0) =-974470.2640587
2. =PV(5%/12,25*12,25000,0) = -4276501.176022
3. =PV(5%/12,25*12,25000,1) = -4276501.46327

Related Videos

PV

See Also

• FV
• IPMT
• PPMT
• NPER
• PMT

References

• Pv

• List of Main Z Functions

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