PVANNUITY( ) function

Returns the present value of a series of payments.

Syntax

PVANNUITY(rate, periods, payment <,type>)

Parameters

rate

Numeric. The interest rate per period.

periods

Numeric. The total number of payment periods in an annuity.

payment

Numeric. The payment made at the end of each period. It cannot change over the life of the annuity.

type

Optional. Numeric constant. Specify 0 if payments are due at the end of the period, or 1 if payments are due at the beginning of the period. If the type parameter is omitted the default value of 0 will be used.

Output

Numeric.

Remarks

You can use this function when you want to determine what a series of future payments is worth now. For example, when you borrow money, the loan amount is the present value to the lender.

The result is returned to two decimal places.

This function assumes a future value of zero and calculates the result based on payments at the end of the period.

Example

At an interest rate of 8% per annum, to calculate the value of receiving $500 a month for the next 20 years, specify:

PVANNUITY(0.08/12, 12*20, 500)

returns 59777.15.



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