PRESENT VALUE Function

The PRESENT VALUE function calculates the present value of a loan or an investment, based on a constant interest rate.

If you know the rate, term, payment, future value and type of a savings scheme or loan you can use the PRESENT VALUE function to work out how much the investment is worth currently (i.e. how much money you need to invest over the same amount of payment periods to equal the return)

Function name	PRESENT VALUE
Usage model	PRESENT VALUE ( rate:NUM, term:NUM, payment:NUM, future value:NUM, type:NUM )
Parameters	This function requires you to replace three of five parameters (two are optional):
rate: NUM	The function uses this value as the interest rate per payment period.
term: NUM	The function uses this value as the total number of payment periods.
payment: NUM	The function uses this value as the paid amount in each payment period.
future value: NUM	(Optional) This represents the value after the last payment period, the default is zero.
type: NUM	(Optional) This value can be entered as a 0 or a 1, 0 meaning payments are due at the end of a payment period and 1 meaning payments are due at the beginning of a payment period. The default is zero.
Result	A number value.

Example

For example, if you have an annual rate of 7.5% over 3 years, paying $100 a month and you know that the future value is $4,023.1381682 then you can work out the PRESENT VALUE by using the following figures:

SET RateNUM TO 0.00625 //(0.075/12 to find the monthly rate)
SET TermNUM TO 36 //(amount of months in 3 years)
SET PaymentNUM TO -100
SET FutureValueNUM TO 4023.1381682
SET TypeNUM TO 0

PRESENT VALUE ( 0.00625, 36, -100, 4023.1381682, 0 )

This produces the result of the Future Value being 0

See Also:
RATE
TERM
PAYMENT
FUTURE VALUE

Download

After you download the example template, you can import the template to any workspace to see this example code in action.