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Excel PV Function

Excel PV function
Summary 
The Excel PV function is a financial function that returns the present value of an investment. You can use the PV function to get the value in today's dollars of a series of future payments, assuming periodic, constant payments and a constant interest rate.
Purpose 
Get the present value of an investment
Return value 
present value
Syntax 
=PV (rate, nper, pmt, [fv], [type])
Arguments 
  • rate - The interest rate per period.
  • nper - The total number of payment periods.
  • pmt - The payment made each period.
  • fv - [optional] A cash balance you want to attain after the last payment is made. If omitted, assumed to be zero.
  • type - [optional] When payments are due. 0 = end of period, 1 = beginning of period. Default is 0.
Version 
Usage notes 

The PV function returns the value in today's dollars of a series of future payments, assuming periodic, constant payments and a constant interest rate.

Notes

  • A stream of cash flows that includes the same amount of cash outflow (or inflow) each period is called an annuity. For example, a car loan or a mortgage is an annuity. When each period's interest rate is the same, an annuity can be valued using the PV function.
  • In annuity functions, cash you pay out, such as a deposit to savings, is represented by a negative number; cash you receive, such as a dividend check, is represented by a positive number. For example, a $2,500 deposit to the bank would be represented by the argument -2500 for pmt if you are the depositor, and by the argument 2500 for pmt if you are the bank.

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