NPV

Returns the net present value of a series of future receipts at a fixed periodic interest rate.

It is assumed that the receipts are at equal intervals and take place at the end of each period.

Syntax:

NPV(interest:Number, range)

where:

interest is the interest rate;
range is the range of cells containing the amounts of the receipts.

Formula:

NPV = i=n ( xi ÷ (1 + interest)i )

where:

n is the number of cash flows (i.e. the number of elements in the range);
xi is the amount received at the end of the i-th period.

Example:

Cells B10:B14 each contain 120 (pounds). Given an interest rate of 10%, the formula

NPV(0.10, B10:B14)

returns the number 500.38 (pounds), the present value of the future receipts.