PV

Intermediate

Financial

Calculates present value of an investment based on periodic payments and interest rate. Essential for investment analysis.

Syntax
=PV(rate, nper, pmt, [fv], [type])
Parameters
rate
Required
(number)

Interest rate per period

nper
Required
(number)

Total number of payment periods

pmt
Required
(number)

Payment per period

fv(number)

Future value (optional, default 0)

Examples
Real-world examples to help you understand how to use PV

Present value of annuity

=PV(5%, 10, -1000)

Present value of 10 annual $1,000 payments at 5% rate

Result: $7,721.73

Investment worth

=PV(4%/12, 360, -1500, 0, 0)

Present value of $1,500 monthly payments for 30 years

Result: $310,867.02

Common Use Cases
  • ✓Evaluate investment opportunities
  • ✓Calculate loan amounts you can afford
  • ✓Determine insurance settlement values
  • ✓Analyze lease vs buy decisions
  • ✓Retirement planning calculations
Pro Tips
  • 💡Result is negative if pmt is positive
  • 💡Use consistent time periods
  • 💡Higher interest rate = lower present value
  • 💡Useful for "what can I afford" calculations
Common Errors
  • ⚠️Wrong sign for pmt parameter
  • ⚠️Inconsistent time periods
  • ⚠️Misunderstanding negative results
Related Formulas
PMTFVRATENPV

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