EXPLAIN THE PV FUNCTION IN EXCEL
=PV(rate,Nper,Pmt,Fv,Type)
=PV(rate, nper, pmt, fv, [fv=0][type=0])
RETURNS THE PRESENT VALUE OF AN INVESTMENT SPECIFYING THE PRESENT VALUE OF AN ANNUITY BASED ON PERIODIC, FIXED PAYMENTS TO BE PAID IN THE FUTURE AND A FIXED INTEREST RATE
rate = exchange rate per period of the loan (per month)
Nper = number of payment periods (months)
Pmt = the payment made each period
Fv = future value – the balance you want at the end
Type = optional – when payments are due
0/omitted = end of period,
1 = start of period
EXAMPLE:
AT THE END OF EACH MONTH, YOU HAVE R500 THAT YOU CAN USE TO PAY OFF A LOAN TO THE BANK.
AND THE BANK IS PREPARED TO GIVE YOU A CONSTANT INTEREST RATE OF 14% PER ANNUM
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