Today, we plan to introduce a number of popular financial functions that are present in Excel. We introduce 5 popular financial functions in excel and, to some extent, show how they function.
To illustrate the application of popular financial functions in Excel, we take an example, a 24 installment loan for $ 150,000, with an annual interest of 6%, a 0.5 % for the month, and a future value (fv) = 0. This means that we will pursue the goal in the future to make the money zero. That is, all installments are paid and not debts. As a result, the value of the present (pv) of this loan is $ 150,000.
PMT function in excel
Enter all information as shown below.
Note that fv is the future value. We want to make it zero in the future. It means my installs is over. The amount of money is 150,000, which should be in pv or the Present Value, and Nper is the number of installments that are 240 or 20 years old. The monthly interest rate is 0.50. now we calculate the monthly PMT function for each month.
RATE function in Excel
You can do different things. Enter other amounts, and even the amount of each installment, and ask Excel to give you the interest rate of the loan. To do this, you need to use the rate function and fill the arguments like the image.
NPER function in Excel
If you have the amount of profit, the amount of each installment, the total amount of the loan, and the future value (0), you can get the number of installments with the Nper function.
Try it to change the amount of payment. What happens if we increase the monthly payment you should pay?
PV function in Excel
This function, taking into account the profit and the number of installments and amounts of each, and the future value. It give you the present value or the same amount of the loan.
FV function in Excel
If you give the number of installments, the amount of each one, and the initial amount and percentage of profit to this function, it will give you the future value.
Inform us other financial functions by commenting on 5 popular financial functions in excel article.