Calculates the present value of a loan or an investment based on a constant interest rate.
Syntax
PV(rate, nper, pmt, [fv], [type])Argument
rateobligatoriskt
The interest rate per period.
nperobligatoriskt
The total number of payment periods in an annuity.
pmtobligatoriskt
The payment made each period; it cannot change over the life of the annuity.
fvvalfritt
The future value or a cash balance you want to attain after the last payment is made.
typevalfritt
The number 0 or 1 and indicates when payments are due (0 = end of period, 1 = beginning of period).
The PV function determines the current worth of a series of future payments. It is commonly used to evaluate the value of an annuity or to determine how much a loan is worth today given future repayment terms.
=PV(0.05/12, 12*5, 200)→-10328.01Calculates the present value of a 5-year loan with a 5% annual interest rate and $200 monthly payments.
Identify your variables
Ensure your interest rate and number of periods align (e.g., if payments are monthly, divide annual rate by 12 and multiply years by 12).
Enter the formula
Input the PV function into a cell, ensuring that outgoing payments are represented as negative numbers.
Excel follows cash flow conventions; since payments are money leaving your pocket, they are represented as negative values.