Present value formula

  • Thread starter Thread starter debithead
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debithead

I need a formula to paste into an excel spreadsheet for the presen
value of an annuity. I need to determine the total value of all of th
payments to be received in future years. I know what the component
are but not that actual formula. Does anyone have this formula?

Thank you in advance for your assistance
 
Where do I find that? When I search at excel - there is a whol
discussion on the subject, but not the actual formula. When I searc
at this site - I get 120 choices, and I couldn't find the formula ther
either. Do you know the formula?

Thank you agai
 
Possible as stated in the NPV help:

For information about annuities and financial functions, see PV.
 
Hi Debithead!

The formula is given in help.

You may prefer it in a different form:

NPV = CF1*(1+i)^-1+CF2*(1+i)^-2+.....CFn*(1+i)^-n

Note that contrary to the financial calculator process the first cash
flow is considered as received at the end of the first period.

If you have a period 0 flow then you should use:

=NPV(Rate,Flows1_End)+CF0

The rate used must be the effective rate for the frequency of the cash
flow.

If your data extends to dates of the future receipts, you might look
at the XNPV function.
--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
Excel and Word Function Lists (Classifications, Syntax and Arguments)
available free to good homes.
 
Norman Harker said:
If you have a period 0 flow then you should use:

=NPV(Rate,Flows1_End)+CF0
Click to expand...
....

Quibble: you could use

=NPV(Rate,AllFlows)*(1+Rate)

if it's inconvenient to chop up the reference to the cashflows.
 
If the payments are all the same (which is true of most annuities), use the
PV function.

=PV(rate,nper,pmt)
 
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