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    PV

    Financial

    Returns the present value of an investment: the total amount that a series of future payments is worth right now.

    Translations
    EnglishPV
    FrenchVA
    SpanishVA
    GermanBW
    ItalianVA
    PortugueseVP
    DutchHW
    PolishPV
    RussianПС
    TurkishBD
    CzechSOUČHODNOTA
    HungarianMÉ
    SwedishNUVÄRDE
    DanishNUTIDSVÆRDI
    FinnishNA
    Syntax
    PV(rate, nper, pmt, [fv], [type])

    Arguments

    • rateInterest rate per period
    • nperTotal number of payment periods
    • pmtPayment made each period
    • fvFuture value (default 0)(optional)
    • type0 = end of period, 1 = beginning of period(optional)
    Examples
    =PV(5%/12, 360, -1000)
    186,281.62

    How much can you borrow if you pay $1K/month for 30 years at 5%

    =PV(8%, 10, -5000)
    33,550.41

    Present value of receiving $5K per year for 10 years at 8%

    =PV(6%/12, 60, 0, -25000)
    18,532.53

    How much to invest now to have $25K in 5 years at 6%

    Tips & Best Practices
    • •Useful for comparing investment options in today's money
    • •Helps answer: how much loan can I afford?
    • •Negative PMT means outgoing payments
    Common Mistakes
    • •Not matching the rate and nper periods - an annual rate with a monthly nper (or vice versa) produces a present value that's off by a large margin
    • •Confusing PV with FV - PV answers 'what is this future amount worth today,' while FV answers 'what will this grow into,' and mixing them up inverts the entire calculation
    • •Forgetting the sign convention, where the returned present value is typically negative when pmt or fv represent money received, since PV treats that as the amount you'd need to pay out now for equivalent value
    Related Functions
    FVCalculates a future value from a present amount, the inverse operation of PV.
    NPVDiscounts a series of potentially uneven cash flows, rather than PV's single, regular payment/amount structure.
    PMTCalculates the periodic payment for a given present value, using the same rate/nper structure as PV.
    Frequently Asked Questions

    Why is my PV result negative?

    PV follows the standard cash flow convention - if the pmt or fv you supplied represents money you'll receive, PV returns a negative to represent the equivalent amount you'd need to pay out today, since inflows and outflows always have opposite signs in these functions.

    What's the difference between PV and NPV?

    PV assumes a single amount or a series of identical regular payments, while NPV can discount a series of different cash flow amounts across periods - use NPV when your cash flows vary from period to period.

    Do I need to adjust the rate for monthly payments?

    Yes, divide the annual rate by 12 and express nper in months to keep both arguments in the same period - mismatched periods produce a badly wrong present value.

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