The PV function returns the present value of a loan or an investment, when using constant and regular periodic payments.

Examples of PV are calculations of for mortgage or other loans, or future values towards investment goals.

PV is part of the set of financial functions that Sigma supports.

Syntax

PV(rate, nperiods, pmt, \[fv\], \[type\])

The PV function syntax has the following arguments:

rate
Required
The interest rate per period.
To use 7%, use the value 0.07.
nperiods
Required
Number of payment periods
pmt
Required
The payment for each period
fv
Optional
The future value, or a cash balance after the last payment.
Defaults to 0.
type
Optional
Due date of the payment.
0
End of the period
1
Beginning of the period
Default is 0.

Notes

  • Be consistent with the units for rate and nperiods arguments. If you make monthly payments on a two-year loan at an annual interest rate of 7%, use the rate calculation of 0.07/12 and nperiods calculation of 2*12. For annual payments on the same loan, use the rate of 0.07 and nperiods of 2.

Examples

PV(.1,5,12000)

The annual payment of $12,000 towards an investment, over 5 years, with an annual interest rate of 10% has a present value of - $45,489.44.

PV(.1/4,5\*4,3000)

The quarterly payment of $3,000 towards an investment, over 5 years, with an annual interest rate of 10% has a present value of - $46,767.49.

PV(.1/12,5\*12,1000)

The monthly payment of $1,000 towards an investment, over 5 years, with an annual interest rate of 10%, has a present value of -$47,065.37.