Excel PV Function

If you want to follow along with this tutorial, please download the example spreadsheet.

Description

The PV function returns the present value of a loan or an investment based on a constant interest rate. It is used to calculate the present value of future payments, alternatively, assuming periodic, constant payments and a constant interest rate.

Syntax and arguments

Formula syntax

Arguments

Rate: Required, the interest rate per compounding period. For example, for a loan with a 12% annual interest rate and monthly payments, the interest rate per month would be 12%/12. Nper: Required, the total number of payment periods in the annuity. For example, for a 10-year loan with monthly payments, the total number of payments periods would be 12*10. Pmt: Required, the fixed payment per period, and cannot be changed during the life of the annuity. Generally, pmt includes the interest and principal, but excludes taxes. If pmt is omitted, the argument fv must be provided. Fv: Optional, the future value at the end of all payment periods. If it is omitted, the function assumes it as 0. Type: Optional, two types that indicate when the payments are due.

Type	Due
0 (zero) or omitted	At the end of the period
1	At the beginning of the period

Return Value

The PV function returns a negative value.

Errors

#VALUE! error value occurs when any one of arguments are non-numeric value.

Remarks

1. Make sure the argument rate and nper are in the same unit. For instance, a 10-year loan with an annual interest rate of 12% and make monthly payments. Use 12%/12 for rate, 12*10 for nper. If a 10-year loan with an annual interest rate of 12% and make quarterly payments, use 12%/4 for rate, 4*10 for nper.

2. Cash outflows, such as deposits to a trust fund, are shown negative numbers. Cash inflows, such as dividends on investments, are shown as positive numbers.

Version

Excel 2003 or later

Usage and Examples

Example1: when fv and type are omitted

In range B3:C7 that lists the details of a load without future value and type, to calculate its present value, please use the formula:

=PV(C3/12,C5*12,C4)

Press Enter key to get the result.

Example2: when fv and type are not omitted

In range B3:C7 that lists the details of a load, to calculate its present value, please use the formula:

=PV(C3/12,C5*12,C4,C6,C7)

Press Enter key to get the result.

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Relative Functions:

• Excel PRICEMAT Function
  The PRICEMAT function returns the price per $100 face value of a security that pays interests at maturity.

• Excel ACCRINT Function
  The ACCRINT function returns the accrued interest on periodic interest-paying securities.

• Excel ACCRINTM Function
  The ACCRINTM function returns the accrued interest for a security that pays interest at maturity.

• Excel AMORDEGRC Function
  The AMORDEGRC function returns the linear depreciation of an asset for each accounting period by applying a depreciation coefficient based on the lifetime of the assets.