PV (Primitive Spread Function) returns the present value of an investment based on the interest rate, number and amount of periodic payments, and future value. The present value is the total amount that a series of future payments is worth now.

SYNTAX:

PV(Rate, Nper, Pmt, Fv, Type)

REMARKS:

Arguments are as follows:

Argument Description 
Rate Interest rate expressed as percentage (per period) 
Nper Total number of payment periods 
Pmt Payment made each period; cannot change over the life of the annuity 
Fv (Optional) Future value
If omitted, it is assumed that the calculation is based on the payments. 
Type (Optional) Indicates when payments are due
If omitted, it is assumed that the payments are made at the end of the period. 
 Set Type equal to                                 If payments are due 
 0                                                       At the end of the period 
 1                                                       At the beginning of the period 

Note: You must specify a value for the Fv argument if you are going to specify a value for the Type argument. 

Use consistent units for specifying the Rate and Nper arguments. If you make monthly payments on a five-year loan at 8 percent annual interest, use 0.08/12 for the Rate argument and 5*12 for the Nper argument. If you make annual payments on the same loan, use 0.08 for Rate and 5 for Nper.

For all the arguments, money paid out such as deposits in an investment, is represented by negative numbers; money you receive, such as dividend checks, is represented by positive numbers.

For all the financial functions (FV, NPER, PMT, and PV), the spreadsheet uses the following formula and solves for the required variable:                                                  

 

If rate is 0, then: 

 

 

EXAMPLES:

PV(0.005,60,-100,0,1)=5198.4188554887