PV is a financial function used in Excel to calculate the present value of a series of cash flows. The function takes into account the time value of money, or the fact that money available today is worth more than the same amount of money available in the future. To use the PV function in Excel, you first need to enter the cash flow amounts for each time period, in either ascending or descending order. Then, in the cell next to the first cash flow amount, type in the PV function and press "Enter." Excel will return the present value of that cash flow. Repeat the process for each remaining cash flow amount, and then sum the results to get the total present value.
The syntax of PV in Excel is as follows: =PV(rate,nper,pmt,fv,type) where: rate is the interest rate per period nper is the number of periods pmt is the payment amount fv is the future value type is the payment type (0 for normal, 1 for annuity due, and 2 for installment)
There are a few ways to use PV in Excel. One way is to use it in a financial formula to calculate the present value of a series of future payments. Another way is to use it as part of a more complex financial formula to calculate the net present value of a series of payments and cash flows.
There are a few occasions when you should not use PV in Excel. One example is when you are trying to calculate the present value of a series of uneven cash flows. In this case, you would use the NPV function. Another time you should not use PV is when you are trying to calculate the value of a bond that has a redemption value or call option. In this case, you would use the IRR function.
In Excel, the PV (present value) function calculates the present value of a series of cash flows, given a discount rate. The function takes the following arguments:
PV (present value)
n (number of periods)
i (discount rate, per period)
PMT (payment per period)
FV (future value)
For example, the following formula calculates the present value of a series of cash flows of $100 per period for 5 periods, at a discount rate of 10%:
Other similar functions in Excel include the FV (future value) and PMT (payment) functions. The FV function calculates the future value of a series of cash flows, given a discount rate and number of periods. The PMT function calculates the payment per period for a given series of cash flows and future value.