PV
The PV function returns the present value of an investment based on periodic, constant payments and a constant interest rate.
Syntax
PV (Rate, Nper, Pmt?, FV, Type?) - > Number
Arguments
| Arguments | Datatype | Description |
|---|---|---|
Rate | Number, Node reference | The interest rate per period. |
Nper | Number | The total number of periods. |
Pmt? | Number, Node reference | Equal payments paid out each period during the course of the investment term. This is an optional argument. |
FV | Number | The future value of investment. Cash outflows are considered as negative and cash inflows as positive. |
Type? | Number | Indicates when the payments are made. Type is zero if payments are made at the end of the period and non-zero if payments are made at the start of the period. This is an optional argument and when omitted, it is considered to be zero. |
Example
Consider a Loan of $20000 for which interest payments are made at the end of each year for 6 years. The objective is to calculate the present value where the interest rate is 7%.
| Year | 1 | 2 | 3 | 4 | 5 | 6 |
|---|---|---|---|---|---|---|
Interest Rate | 7% | 7% | 7% | 7% | 7% | 7% |
Number of periods | 1 | 2 | 3 | 4 | 5 | 6 |
Payments Made | 1400 | 1400 | 1400 | 1400 | 1400 | 1400 |
Type | 0 | 0 | 0 | 0 | 0 | 0 |
To achieve this, the following formula should be written in the [Present Value] node:
PV ([Interest Rate], [Number of Periods], [Payments Made],0,0)
Result
Present Value | ₹ -1,308.41 | ₹ -2,531.23 | ₹ -3,674.04 | ₹ -4,742.10 | ₹ -5,740.28 | ₹ -6,673.16 |
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