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Using PV to Figure Out How Much House You Can Afford
terest, you use 12% / 12 for guessand 4 × 12 for nper. If you make annual pay-
ments on the same loan, you use 12% for guessand 4 for nper.
Figure 13.3 shows how to calculate an interest rate.
Figure 13.3.
Figure 13.3. Given the other terms for a loan, you can back into the interest
Given the other terms for a loan, you can back into the interest
rate with
rate with RATE
RATE..
Using
Using PPV to Figure Out How Much House You Can Afford
to Figure Out How Much House You Can Afford
If you are looking for a monthly house payment of \$1,500 with a 15-year loan
at 3.2% annual interest rate, you can back into the loan amount by using the
PV function.
Syntax
PV(rate,nper,pmt,fv,type)
The PV function returns the present value of an investment. The present
value is the total amount that a series of future payments is worth now. For
example, when you borrow money, the loan amount is the present value to the
lender. This function takes the following arguments:
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