PV Function Explained
The PV function in Microsoft Excel calculates the present value of an investment, which is the total amount that a series of future payments is worth now. It takes the following arguments: rate, nper, pmt, fv, and type. Rate is the interest rate per period, nper is the total number of payment periods in an annuity, pmt is the payment made each period, fv is the future value, or a cash balance you want to attain after the last payment is made, and type is a number indicating when payments are due.
PV Function Syntax
PV(rate, nper, pmt, [fv], [type])
- rate: The interest rate per period.
- nper: The total number of payment periods.
- pmt: The payment made each period; it cannot change over the life of the annuity.
- fv: (optional) The future value, or a cash balance you want to attain after the last payment is made. If omitted, it is assumed to be 0 (the future value of a loan, for example, is 0).
- type: (optional) A number 0 or 1 and indicates when payments are due. 0 or omitted = end of the period. 1 = beginning of period.