Question

. Provide the structure of the Excel commands to calculate pv(present value), fv(future value), rate(interest rate), pmt(payment), nper(number of periods).

Answer 1

PV --> =PV(rate, nper, pmt, [fv], [type])

FV --> = FV(rate, nper, pmt, [pv], [type])

rate --> =RATE(nper, pmt, pv, [fv], [type])

pmt --> = PMT(rate, nper, pv, [fv], [type])

nper --> =NPER(rate, pmt, pv, [fv], [type])

where, pv = present value

fv = future value

nper = number of periods

pmt = payments made every period

rate = rate of interest or the cost of capital

type = 0 --> payments made at end of period

type = 1 --> payments made at begining of period