PV

Computes the present value of a series of equal payments discounted at a periodic interest rate for a term.

Syntax:

PV(payment:number, interest:number, term:number)

paymentis the regular payment made,
interestis the rate of interest per period the payments will receive,
termis the length of the investment in periods.

The following formula underlies the PV function:

present value = payment × ( (1 - (1 + interest)-term) ÷ interest )

Example:

If you invested £2000 a year for 30 years, which could earn 12% interest, what is the present value of the investment? The formula

PV(2000, 0.12, 30)

returns the number 16110.37 (pounds).