MS Excel Financial Function is very helpful to calculate No of Installment (NPER), Present Value (PV) of any future cash flows, Future Value (FV), Amount per Installment given or receive (PMT), Net Present Value (NPV) of any project, Rate of Interest etc.
These types of financial measurement is very important for managerial decision making process, finance decision making process, accounts department and more.
First Present Value (PV) is calculating. Example is mentioned under:-
Say, Mr X, retired employee, gets pension $10,000 at the end of each month for 20 years. Rate of interest 10% p.a., CALCULATE PV (Present Value)
VIEW PICTURE AND SOLUTION (click on picture to view full size)
or VIEW UNDER MENTIONED VIDEO TUTORIAL
Pension Amount =($10,000.00) Per Month (put negative value)
Rate of Interest =% Per Year
No of Installment = i.e. 20 years & 12 months each year
Present Value = ?
Present Value(PV) = $7,593,688.36 (calculated)(view picture)
In 2003 Excel:- Insert Menu -- Function -- Select Financial -- Select PV -- Ok -- Rate:- 10%/12, PMT:- ($10000.00), NPER:- 204
In 2007 Excel:- Formula Menu -- Financial -- PV --
Rate:- 10%/12, PMT:- ($10000.00), NPER:- 204
Always Put Negative PMT i.e. Loan or Pension Amount etc