PV

Calculates the present value of a series of equal payments discounted at a periodic interest rate for a term.

Syntax:

PV(payment:number, interest:number, term:number)

where:

payment is the regular payment made;
interest is the rate of interest per period the payments will receive;
term is the term of the investment (number of periods).

Formula:

PV = payment × ( (1 − (1 + interest)term) ÷ interest )

Example:

If you invested £2000 a year for 30 years, which could earn 12% interest, what is the present value of the investment?

The formula

PV(2000, 0.12, 30)

returns the number 16110.37 (pounds).