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Financial Functions
The arguments
for financial functions are either numbers
or addresses
of cells
that contain numbers.
When the argument is the interest rate, enter its actual
value (for example, enter .07 or 7% rather than 7). Be sure to specify the
same units for the term and the interest. If the interest is monthly, the term is
also monthly. Enter all values without spaces.
7"
Function
C_RI_
(interest, future
value, present
value)
DDB
(cost,
salvage,
life,
period)
FV _ayments,
interest,
term)
IRR (guess,
range)
NPV (interest,
range).
PiT
_rincipal,
interest,
term)
PV (payments,
interest,
term)
RATE (future value,
present
value, term)
Descdption
Number of compounding
terms
or periods required for an investment
to grow
to a future value. Interest is the interest rate for the calculation.
Future value is
the proposed
value of the asset. Present value is the current value of the asset.
For example,
CTERM(.05,1000,500)
returns 14.2 periods.
DoubleMledining
balance
depredation
of an asset
using
the double-declining
balance
method.
Cost is the original
cost of the asset.
Salvage
is the ending
value
of the
asset.
Life is the duration
of the depreciation,
using
the same
units
as Per_d.
Period
is the time
period
for which
the depredation
calculation
occurs.
Not
a cumulative
calculation.
Returns the future
value
of a stream of regularly invested payments. Payments
is
the payment
made each period. Interest is the interest rate for the same time
period as payments.
Term is the total number
of payments
that are made. Be
careful to enter the interest rate for the same time pen'od as the payments.
Internal
rate of return of series of irregular payments at regular intervals, k
returns the interest rate when you know the initial investment
and know you
will get regular payments
of varying amounts.
Guess is the number you guess is
approximately the-in_x'_st:rate.,-Range
fs the address defining the range for,the
cash flow tabl_.
Net present value is the amount of money (in today's dollars) to be spent in the
future. Interest is the interest rate for the calculation. Range is the cells
containing the cash flow information.
Calculates
the constant
payment
required
to repay
a loan
at a specified
interest
rate over
a given
period
of time. Pm'ncipal
is the amount
of the loan. Interest
is
the interest
rate for the same
time period
as the term.
Term
is the
interval
at
which
the payments
are made.
Be careful
to enter
the interest
ratefor
the same
time period
as the terms.
For example,
to determine
the monthly
payment
for a
20 year loan
of $75,000,
at 5% annual
interest.
=PMT(75000,.05/12,240)
returns
$494.97.
Returns the present
value of an investment. Payments
is the payment
made
each period. Interest is the interest rate for the same time period as payments.
Term is the total number
of payments
that are made. Be careful to enter tbe
interest rate for the same time.period
as tbe payments.
Required interest rate to reach a future value. Future value is the value of the
annuity at the end of the investment
period. Present value is the value of the
annuity today. Term is the time periods for the investment.
Appendix
216
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