Multiplan: Examples of the PV and NPER Functions
PSS ID Number: Q10052
Article last modified on 10-08-1990
PSS database name: D_MPlan

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MS-DOS


Summary:

The following is an example of how to use Microsoft Multiplan's PV and
NPER functions.

Suppose you wanted to invest $50 at the beginning of each month for 18
months at 9 percent annual interest. Your goal is to have an ending
balance of $1,538.91. How much would you have to deposit initially to
end up with $1,538.91? 

If you deposit $50 a month (PMT) at the beginning of every month
(T=1), at a monthly interest rate of .75 percent (RATE) for a period
of 18 (NPER) months, the ending balance will be -1,538.91 (FV). The
current value of your account right now (that is, the amount you have to
deposit initially) is given by the following equation: 

   PV(.75,18,50,-1538.91,1)=-116

More Information:

The following is another example: 

Suppose you wanted to pay off a $5,000 loan at 12 percent annual
interest with monthly payments of $111.22 that will be paid at the end
of the month. How many monthly payments would it take you to pay off
the loan? 

You will take out the loan for $5,000 (PV) at a monthly interest
rate of 1.00 percent (RATE) and will pay off the loan in monthly
payments of - 111.22 (PMT) made at the end of each month (T=0). The
number of payments to pay off the loan is given by the following
equation: 

   NPER(1.00%,-111.22,5000)=60 

Copyright Microsoft Corporation 1990.