Calculates the present value of the combination of payments and future value as provided.
PV(InterestRate, Period, Payment, FV, AnnuityType)
InterestRate: the interest rate per period (expressed as a decimal, 8% = 0.08).
Period: the number of payments to be made.
Payment: the payment to be made each period.
FV: the future value as of the end of the period.
AnnuityType: indicates whether payments are made at the beginning or end of the period. 0 indicates payments are made at the end of the period. 1 indicates payments are made at the beginning of the period.
To calculate the present value of a 10-year amortization payment of a $1,037.03 per year paid at the beginning of each year using an 8% interest rate:
PV(.08, 30, 822.48, 0, 1) equals -10,000.05