PV function
Rate
The (fixed) interest rate per period.
NumberOfPeriods
The total number of payment periods in the term.
Payment
The payment made each period. If set to 0, the value of the
futureValue parameter is used instead.
FutureValue
The cash balance to be attained at the end of the term. (With a loan, this would normally be 0 and with a bond, this would be the redemption value.) If omitted, it is assumed to be 0.
Type
0 if payments are made at the end of each period and 1 if payments are made at the start of each period (including a payment at the start of the term). If omitted, it is assumed to be 0.
Returns
The present value of a stream of future payments.
Returns the present value of a stream of future payments with a final lump sum.
Examples
Returns roughly $-10,379.66. Let's assume that you have the opportunity to buy an annuity, which would pay you $1,000 at the end of each year for 15 years. You assume a constant interest rate of 5%. On this basis, the annuity is worth roughly $10,379.66 today. The result is negative, because you must pay for the annuity.
Returns roughly $3,336.57. Let's assume that you are considering a loan of $3,500, which would mean paying back $100 at the end of each month for three years. You assume a constant interest rate of 5%. On this basis, the loan is only worth roughly $3,336.57. The monthly payment is negative because you pay this sum, and the result is positive because the loan is paid to you.
Returns roughly $-1,346.36. Let's assume that a three-year bond is issued, paying $100 semi-annually and $1,000 on maturity. An annual rate of return of 7% is required (compounded semi-annually). As a result, the bond on issue is valued at roughly $1,346.36. The returned value is negative, as the bond is paid by you.