Fresh Excel Tips

In this example you have to decide on the amount of money you want to invest. To solve this problem, you use the PV function, which returns the present value of an investment. This is the total amount that a series of future payments is worth now. Here is the syntax that is used for the PV Function.
PV(rate, nper, pmt, fv, type)
rate: The interest rate per period.
nper: The total number of payment periods in an annuity.
pmt: The payment made each period, which is a constant value.
fv: The future value. This is the amount you want after the last payment is made.
type: A number that indicates when payments are due. 0 or omitted indicates the end of the period, and 1 indicates the beginning of the period.

To decide how much to invest:

1. In cell C1 enter the estimated return per year.
2. In cell C2 enter the number of periods in years.
3. Enter the interest rate in cell C3.
4. Calculate the maximum investment amount in cell C4 with the following formula: =PV(C3,C2,C1).
5. Press Enter.

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

1. How to Use the RATE function to calculate interest rate in Excel
2. How to Use the PMT function to determine the payment of a loan
3. How to Use the FV function to calculate total savings account balance
4. How to use the PV function to compare investments in Excel
5. Use the DDB function to calculate double-declining balance method