Microsoft Office Tutorials and References

In Depth Information

**PV**

PRICEMAT
is calculated as follows:

Figure 6.31

Returns the value of

a security that pays

interest at maturity

and price per $100

face value by using the

PRICEMAT
function.

A

The function

built with cell

referencing

PV

Based on an investment,
PV
returns the present value.

=PV(rate,nper,pmt,fv,type)

The
PV
function returns the present value of an investment. For example, on a car loan, the

present value is the amount of the loan to the lender. Figure 6.32 presents a
PV
example. If

you can afford monthly payments of $500 a month, and can get a loan for 5.8%, what amount

could you afford on a 3-year loan? The formula
=PV(C9/12,D9*12,E9)
would result in a total

loan amount over 3 years of $$16,485.

The interest rate of the loan. If the annual interest rate is 6% and you make

monthly payments, the interest rate is 6%/12 =.50%.

RATE

The number of total paymentsâ€”12 months per year at 2 years would be 12*2 =24.

NPER

The payment made each period. It must remain constant. Typically, it includes

principal and interest.

PMT

The future value or cash balance you want to attain upon the last payment. For

a loan it would be zero. For a future amount you want to attain with payments,

it would be the total goal amount.

FV

The payment timingâ€”when the payments are due.

TYPE