Use
PV function is used to get the present value/ current worth of the future cash flows that will receive at a future date. It is an important concept in the time value of the money.
Syntax
=PV(rate, nper, pmt, [fv], [type])
Arguments of the function:
rate – The rate of interest to discount the future value.
Nper – The number of payment periods, for example, if you get a loan for 2 years and paid installments on each month end then the number of payments periods will be 12*2= 24.
Pmt – The payment/ installment made in each period.
Note: If pmt is omitted then you must define future value in [fv] argument.
[fv] – The optional argument which is the future value that you want to attain after last final payment.
[type] – The optional argument used to specify either payments are due at the end or beginning.
Set type equal to |
If payments are due |
0 or omitted | At the end of the period |
1 | At the beginning of the period |
Example
Formula:
Result: