# PV function

Excel PV Function is a financial function that helps you calculate the present value of an investment or a series of future payments. In simpler terms, it helps you determine how much a future cash flow is worth in today’s dollars. This is useful for making financial decisions, such as whether to invest in a project or how much a loan is worth now.

## Syntax

PV(rate, nper, pmt, [fv], [type])

## How to use

The Excel PV Function allows you to find the present value of future cash flows. Here are some examples of how to use it:

Example 1: Calculating the present value of an investment

In this example, we have an investment with an annual interest rate of 5%, a total of 5 payment periods, and a payment of \$1,000 made at the end of each period. The future value is 0, and payments are made at the end of the period. The function will return the present value of the investment, which is \$4,329.48.

Example 2: Calculating the present value of a loan

In this example, we have a loan with an annual interest rate of 3%, a total of 10 payment periods, and a payment of \$200 made at the beginning of each period. The future value is 0, and payments are made at the beginning of the period. The function will return the present value of the loan, which is \$1,850.76.

By using the PV Function, you can make informed financial decisions by understanding the value of future cash flows in today’s terms. It’s a powerful tool for analyzing investments, loans, and other financial scenarios.

Tomasz Decker is an Excel specialist, skilled in data analysis and financial modeling.