Fresh Excel Tips

Two investments have to be compared. The amount of each investment, the number of periods, the interest, and the estimated return are given. To calculate and compare, use the PV function as described below.

To compare investments:

1. In cells B2 and C2 enter the investment amounts.
2. In cells B3 and C3 enter the interest rates.
3. In cells B4 and C4 enter the number of periods.
4. In cells B5 and C5 enter the estimated return of each investment.
5. Select cells B7:C7 and type the following formula: =-PV(B3,B4,B5).
6. Press Ctrl+Enter.
7. Select cells B8:C8 and type the formula =B7-B2.
8. Press Ctrl+Enter.

Investment 2 is more expensive than Investment 1.

This tip is compatible with Excel 97, 2000, 2003 and 2007.

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