PresentValue Command

PresentValue[ <Rate>, <Number of Periods>, <Payment>, <Future Value (optional)>, <Type (optional)> ]

Returns the total amount of payments of an investment.

• <Rate> Interest rate per period.
• <Number of Periods> Total number of payments for the loan.
• <Payment> The amount paid in each period.
• <Future Value (optional)> A cash balance you want to attain after the last payment. If you do not enter a future value, it is assumed to be 0.
• <Type (optional)> Indicates when payments are due. If you do not enter a value or you enter 0 the payment is due at the end of the period. If you enter 1 it is due at the beginning of the period.

Example:

PresentValue[ 12%/12, 4*12, -100, 5000, 0 ] yields a present value of 696.06.

PresentValue[ 12%/12, 4*12, -100, 5000, 1 ] yields a present value of 734.07.

Note: Make sure that you are consistent about the units you use for <Rate> and <Number of Periods>. If you make monthly payments on a four-year loan at an annual interest rate of 12 percent, use 12%/12 for rate and 4*12 for number of payments.

Note: For all arguments, cash paid out is represented by negative numbers and cash received by positive numbers.

Note: See also Payment, Periods, Rate and Future Value commands.