PV
PV('Rate', 'Nper', 'Pmt' [, 'Fv' [, "Type"]])
The PV function calculates the present value of a recurring investment based on a constant interest rate, a number of recurring payments, a payment per period, and either ordinary annuity or annuity due ("Type") indicating whether payments are due at the beginning or the end of the period.
Use this function when the rate, duration, and payment are known and you want to calculate the present value of an annuity-style payment stream.
Parameters
- RateNode referenceRequired
- The interest rate.
- NperNode referenceRequired
- Number of periods: the number of payments to be made.
- PmtNode referenceRequired
- Payment per period: the amount of each payment made. Payments/costs should ideally be entered as a negative number, for example
-500, but this is not required. - FvNode referenceOptional
- Future value remaining after the final payment has been made. Default:
0. - TypeKeywordOptional
- Indicates when payments are due (
1= payment at beginning of period / annuity due,0= payment at end of period / ordinary annuity). Default:0.
Watch out
'Pmt'is the leading input node: its levels define the result’s shape, and every other input is aligned to it.- Every other input may use only levels that also exist on
'Pmt'. It may use fewer levels, but not a level that'Pmt'does not have. - On the levels it shares with
'Pmt', each input must cover the same level values, otherwise the rows do not line up and the function returns an error. - Each input can also be a single number.
- Giving every input the same levels as
'Pmt'skips an internal alignment step and improves performance. - If costs or payments are entered as positive numbers in your model, multiply the result by
(-1).
Example
Calculate the present value of an annuity
This example shows a standard annuity setup with a fixed interest rate, a fixed duration, and a periodic payment. It returns the present value implied by the payment stream.
| Parameter | Value |
|---|---|
Rate (Interest Rate) | 0.03 |
Nper (Number of Periods) | 5 |
Pmt (Payment per Period) | -500 |
Fv (Future Value) | 0 |
TypePayment at Beginning of Period (Annuity Due) = 1 Payment at End of Period (Ordinary Annuity) = 0 | 0 |
Formula: PV('Rate', 'Nper', 'Pmt', 'Fv', "Type")
| PV Result |
|---|
| 2,289.85 |