This post will guide you how to use Excel PV function with syntax and examples in Microsoft excel.

Description

The Excel PV function returns the present value of a loan or investment based on constant payments and a constant interest rate. So you can use the PV function to get the present value based on a series of future payments.

The PV function is a build-in function in Microsoft Excel and it is categorized as a Financial Function.

The PV function is available in Excel 2016, Excel 2013, Excel 2010, Excel 2007, Excel 2011 for Mac.

Syntax

The syntax of the PV function is as below:

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

Where the PV function arguments are:

• Rate -This is a required argument. The interest rate per period.
• nPer -This is a required argument. The total number of payments periods in an annuity.
• Pmt – This is a required argument. The amount of the payment made each period.
• Fv – This is an optional argument. The future value or a cash balance you want to attain after the last payment is made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
• Type – This is an optional argument. The number 0 (zero) or 1 and indicates when payments are due.

Set type equal to	If payments are due
0 or omitted	At the end of the period
1	At the beginning of the period

 Note:

• Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12 percent for rate and 4 for nper.

Excel PV Function Examples

The below examples will show you how to use Excel PV Function to calculate the present value of an investment.

#1 to get the present value of an annuity with the terms in A2:A4, using the following formula:

=PV(B1,B2,B3,B4)

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