Topic 2 - Spreadsheets

Study Unit 4 / 5: Exam – PV

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

Study Unit 4 / 5: Exam – IF (Prev Lesson)
(Next Lesson) Study Unit 4 / 5: Exam – VLOOKUP
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