Excel Formula Coach
PV function, scenario #1: Use it to find the present value of a loan
Returns the principal amount of a loan, based on a steady interest rate, regular payments, and a set number of payment periods.
For example, you want to purchase a home — you can get a 4.5% interest rate, you'll have 30 years to repay the loan, and you've budgeted a $1,250 per month payment. Use PV to find the loan amount (the present value) you can afford. The answer is $246,701.45.
Syntax PV(rate, nper, pmt, [fv], [type])
Tip Wondering why [fv] and [type] are in square brackets? The brackets mean they're optional. If you don't include values for fv and type in your formula, Excel assumes your balance will be $0 at the end of the loan, and that your payments are due at the end of the period.
The PV function has the following arguments — the first three are always required:
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