Quick Answer

PV Function

Calculates the present value of a series of future payments or a future lump sum.

Syntax

PV

(rate, nper, pmt, [fv], [type])

Parameters

Parameter	Description	Required
rate	Interest rate per period.	Required
nper	Total number of payment periods.	Required
pmt	Payment made each period (default 0).	Required
fv	Future value or cash balance after the last payment (default 0).	Optional
type	0 = end of period (default), 1 = beginning of period.	Optional

Basic Example

Present value of monthly payments

=PV(0.05/12, 360, -1000)

Result$186,281.62

The value today of receiving $1,000 per month for 30 years at 5% annual interest.

Advanced Examples

Example 1: Present value of a future goal

Savings target

How much do I need today to have $50,000 in 10 years at 7%?

=PV(0.07, 10, 0, -50000)

Result: $25,417.35

You need $25,417 today to grow to $50,000 in 10 years at 7% interest.

How PV Works

PV discounts each future cash flow back to today using the discount rate. The result is positive when future payments are entered as negative outflows.

1

Enter rate

Type the rate

2

Enter nper

Type the nper

3

Enter pmt

Type the pmt

4

Enter fv

Type the fv

5

Calculate

Press Enter to get the result.

Important Notes & Limitations

All inputs must use the same period unit.
Assumes constant payments and a constant discount rate.
Does not account for inflation, taxes, or fees.

Common Errors & Fixes

Wrong present valueThe rate was not adjusted for the period.

Fix: Divide annual rate by the number of periods per year.

Sign confusionFuture value or payments have the wrong sign.

Fix: Use negative for outflows and positive for inflows.

Download Practice File

Practice PV with Real Data

Download a sample CSV file with pre-populated data and practice exercises for the PV function. Works in both Excel and Google Sheets.

Works in Google SheetsCompatible with ExcelIncludes exercises

File format: CSV (comma-separated values) - opens in Excel, Google Sheets, and all spreadsheet apps

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AMORLINC

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COUPDAYBS

Calculates the number of days from the beginning of the coupon period to the settlement date.

COUPDAYS

Calculates the number of days in the coupon period that contains the settlement date.

Frequently Asked Questions

What is the present value formula?

PV = FV / (1 + r)^n, where r is the rate and n is the number of periods.

Can PV calculate a perpetuity?

Excel PV does not directly support infinite cash flows, but a perpetuity equals payment divided by rate.

Why is PV negative?

PV is positive when future payments are negative. The sign follows cash-flow convention.