Manual

Financial Functions
The arguments for financial functions are either numbers or addresses of cells
that contain numbers. When the argument is the interest rate, enter its actual
value (for example, enter .07 or 7% rather than 7). Be sure to specify the
same units for the term and the interest. If the interest is monthly, the term is
also monthly. Enter all values without spaces.
7"
Function
C_RI_ (interest, future
value, present value)
DDB (cost, salvage, life,
period)
FV _ayments, interest,
term)
IRR (guess, range)
NPV (interest, range).
PiT _rincipal, interest,
term)
PV (payments, interest,
term)
RATE (future value,
present value, term)
Descdption
Number of compounding terms or periods required for an investment to grow
to a future value. Interest is the interest rate for the calculation. Future value is
the proposed value of the asset. Present value is the current value of the asset.
For example, CTERM(.05,1000,500) returns 14.2 periods.
DoubleMledining balance depredation of an asset using the double-declining
balance method. Cost is the original cost of the asset. Salvage is the ending
value of the asset. Life is the duration of the depreciation, using the same units
as Per_d. Period is the time period for which the depredation calculation
occurs. Not a cumulative calculation.
Returns the future value of a stream of regularly invested payments. Payments is
the payment made each period. Interest is the interest rate for the same time
period as payments. Term is the total number of payments that are made. Be
careful to enter the interest rate for the same time pen'od as the payments.
Internal rate of return of series of irregular payments at regular intervals, k
returns the interest rate when you know the initial investment and know you
will get regular payments of varying amounts. Guess is the number you guess is
approximately the-in_x'_st:rate.,-Range fs the address defining the range for,the
cash flow tabl_.
Net present value is the amount of money (in today's dollars) to be spent in the
future. Interest is the interest rate for the calculation. Range is the cells
containing the cash flow information.
Calculates the constant payment required to repay a loan at a specified interest
rate over a given period of time. Pm'ncipal is the amount of the loan. Interest is
the interest rate for the same time period as the term. Term is the interval at
which the payments are made. Be careful to enter the interest ratefor the same
time period as the terms. For example, to determine the monthly payment for a
20 year loan of $75,000, at 5% annual interest.
=PMT(75000,.05/12,240) returns $494.97.
Returns the present value of an investment. Payments is the payment made
each period. Interest is the interest rate for the same time period as payments.
Term is the total number of payments that are made. Be careful to enter tbe
interest rate for the same time.period as tbe payments.
Required interest rate to reach a future value. Future value is the value of the
annuity at the end of the investment period. Present value is the value of the
annuity today. Term is the time periods for the investment.
Appendix 216