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Functions WorkingPresent value of cash ows

Future value of cash ows

Net Present value of cash ows

Internal rate of return

EAR

Principal Component

Interest Component

PVFV

NPV

XNPVNet Present value of cash ows if

not periodic

IRRXIRR

S !PR"# C$%INES$

FVSC&E# %EEFFEC$

PP!$IP!$
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https'((support)o*ce)microsoft)com(client(+nancial,functions,-.-/d/0e,.12-,3f4


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3,/5c0,f6f043c460d/


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7AC8 $" IN#EX


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FV function

S9nta:

FV;rate


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#ata #escription1)1. Annual interest rate

01 Num6er of pa9ments,411 Amount of the pa9ment,-11 Present value

0 Pa9ment is due at the 6e@innin@ of tFormula #escriptionKFV;A4(04< A2< A3< A-< A.?

E:ample 4#ata #escription

1)04 Annual interest rate04 Num6er of pa9ments

,0111 Amount of the pa9mentFormula #escriptionKFV;A4(04< A2< A3? Future value of an investment usin@


1)00 Annual interest rate2- Num6er of pa9ments

,4111 Amount of the pa9ment

0 Pa9ment is due at the 6e@innin@ of tFormula #escriptionLVA% EM Future value of an investment with th


1)1. Annual interest rate04 Num6er of pa9ments

,011 Amount of the pa9ment

,0111 Present value0 Pa9ment is due at the 6e@innin@ of t

Formula #escriptionLVA% EM Future value of an investment usin@

Future value of an investment usin@the terms in A4'A-)


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e information on annuit9 functions< see PV)

cif9in@ rate and nper) If 9ou maBe monthl9 pa9ments on a four,9ear loa

n@s< is represented 69 ne@ative num6ers cash 9ou receive< such as divi

of a new E:cel worBsheet) For formulas to show results< select them< pr

investment 6ased on a constant interest rate) Gou can use FV with eithe

a9ments) At the same time< 9ouHll learn how to use the FV function in a

lump sum pa9ment)

uit9)

e over the life of the annuit9) $9picall9< pmt contains principal and inter

series of future pa9ments is worth ri@ht now) If pv is omitted< it is assu

s are due) If t9pe is omitted< it is assumed to 6e 1)
https://support.office.microsoft.com/client/financial-functions-5658d81e-6035-4f24-89c1-fbf124c2b1d8http://go.microsoft.com/fwlink/?LinkID=512007http://go.microsoft.com/fwlink/?LinkID=512008http://go.microsoft.com/fwlink/?LinkID=512008http://go.microsoft.com/fwlink/?LinkID=512007https://support.office.microsoft.com/client/financial-functions-5658d81e-6035-4f24-89c1-fbf124c2b1d8


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e period ;1 indicates pa9ment is due at end of period?Result

4


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n at 04 percent annual interest< use 04 (04 for rate and 3D04 for nper) If 9

dend checBs< is represented 69 positive num6ers)

ss F4< and then press Enter) If 9ou need to< 9ou can ad ust the column wid

r periodic< constant pa9ments< or a sin@le lump sum pa9ment)

ormula)

st 6ut no other fees or ta:es) If pmt is omitted< 9ou must include the pv a

ed to 6e 1 ;Jero?< and 9ou must include the pmt ar@ument)
https://support.office.microsoft.com/client/financial-functions-5658d81e-6035-4f24-89c1-fbf124c2b1d8http://go.microsoft.com/fwlink/?LinkID=512007http://go.microsoft.com/fwlink/?LinkID=512007https://support.office.microsoft.com/client/financial-functions-5658d81e-6035-4f24-89c1-fbf124c2b1d8


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ou maBe annual pa9ments on the same loan< use 04 for rate and 3 for n

ths to see all the data)

@ument)


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er)


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XNPV function

#escription

S9nta:XNPV;rate< values< dates?

$he XNPV function s9nta: has the followin@ ar@uments'

RemarBs!icrosoft E:cel stores dates as se uential serial num6ers so the9 can 6e used in cal

Num6ers in dates are truncated to inte@ers)

If an9 ar@ument is nonnumeric< XNPV returns the LVA% EM error value)

If an9 num6er in dates is not a valid date< XNPV returns the LVA% EM error value)

If an9 num6er in dates precedes the startin@ date< XNPV returns the LN !M error v

If values and dates contain a di erent num6er of values< XNPV returns the LN !M e

XNPV is calculated as follows'

where'

7AC8 $" IN#EX

$his article descri6es the formula s9nta: and usa@e of the XNPV function in !icroso

Returns the net present value for a schedule of cash ows that is not nec

Rate Re uired) $he discount rate to appl9 to the cash ows)

Values Re uired) A series of cash ows that corresponds to a schedule of pa9men

#ates Re uired) A schedule of pa9ment dates that corresponds to the cash ow p


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di K the ith< or last< pa9ment date)

d0 K the 1th pa9ment date)

Pi K the ith< or last< pa9ment)

E:ampleCop9 the e:ample data in the followin@ ta6le< and paste it in cell A0 of a new E:cel

Values #ates

; 01


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culations) 79 default< Oanuar9 0< 0511 is serial num6er 0< and Oanuar9 0< 411/ is

lue)

rror value)

ft E:cel)

ssarily periodic . To calculate the net present value for a series of cash

s in dates) $he +rst pa9ment is optional and corresponds to a cost or pa9ment th

9ments) $he +rst pa9ment date indicates the 6e@innin@ of the schedule of pa9m


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worBsheet) For formulas to show results< select them< press F4< and then press E


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erial num6er 2533/ 6ecause it is 25


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ter) If 9ou need to< 9ou can ad ust the column widths to see all the data)


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t< it must 6e a ne@ative value) All succeedin@ pa9ments are discounted 6ased o

r)


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a 2.-,da9 9ear) $he series of values must contain at least one positive value an


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one ne@ative value)


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IRR function

#escription

S9nta:

IRR;values< =@uess>?

$he IRR function s9nta: has the followin@ ar@uments'

Values must contain at least one positive value and one ne@ative val

IRR uses the order of values to interpret the order of cash ows) 7e s

If an arra9 or reference ar@ument contains te:t< lo@ical values< or em

!icrosoft E:cel uses an iterative techni ue for calculatin@ IRR) Starti

In most cases 9ou do not need to provide @uess for the IRR calculatio

If IRR @ives the LN !M error value< or if the result is not close to wha

RemarBs

IRR is closel9 related to NPV< the net present value function) $he rate of ret

NPV;IRR;A4'AQ?


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Cop9 the e:ample data in the followin@ ta6le< and paste it in cell A0 of a ne

#ata #escription; Q1


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e to calculate the internal rate of return)

ure to enter 9our pa9ment and income values in the se uence 9ou want)

pt9 cells< those values are i@nored)

@ with @uess< IRR c9cles throu@h the calculation until the result is accurat

n) If @uess is omitted< it is assumed to 6e 1)0 ;01 percent?)

9ou e:pected< tr9 a@ain with a di erent value for @uess)

urn calculated 69 IRR is the interest rate correspondin@ to a 1 ;Jero? net pr

ulation< the value is e ectivel9 1 ;Jero?)>

7AC8 $" IN#EX

icrosoft E:cel)

) $hese cash ows do not have to 6e even< as the9 would 6e for an annuit9) &owever< the cash oinvestment consistin@ of pa9ments ;ne@ative values? and income ;positive values? that occu

for which 9ou want to calculate the internal rate of return)


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w E:cel worBsheet) For formulas to show results< select them< press F4< an

to include a @uess ;in this e:ample< ,01 ?)


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within 1)11110 percent) If IRR canHt +nd a result that worBs after 41 tries

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