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PV (Present Value) function in Excel


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.


=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




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