The PV function calculates the present value of an annuity, based on the amount of the payment, the interest rate per period, and the number of periods. Ability computes present value using the following formula:
For example, to find the present value of an annuity with payments of $400, at 12.5% interest per period, after 4 periods, type:
PV(400,12.5%,4)
Ability calculates the present value and displays 1202.26 or $1,202.26 (depending on the currency formatting of the cell – use the Number command from the Format menu to change it).
See also: