What is PV?

The PV (Present Value) function calculates the present value of an investment or series of future payments based on a constant interest rate.

Syntax

=PV(rate, nper, pmt, [fv], [type])

Arguments

Argument	Description
rate	Interest rate per period
nper	Number of periods
pmt	Payment made each period
fv	Future value; optional
type	Payment timing; optional

Example

Suppose you plan to invest 5,000 every month for 5 years at an annual interest rate of 8%.

Item	Value
Monthly Investment	5,000
Annual Interest Rate	8%
Investment Period	5 Years
Payments per Year	12

Formula:

=PV(8%/12,5*12,-5000)

Practical Use

PV can help answer:

“What is the current value of a series of future payments?”

Practice

Create a Present Value Calculator with changeable investment, interest rate, and period.