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PV Function

Excel 2007+

Summary

The Excel PV function calculates the present value of an investment or loan based on a constant interest rate and equal payments. It's essential for financial analysis, helping determine the current worth of future cash flows from annuities like mortgages, car loans, or savings plans.

Syntax

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

Parameters

Parameter	Type	Required	Description
rate	`Number`	Yes	Interest rate per period. For monthly payments on a 10% annual loan, use 10%/12 or 0.00833.
nper	`Number`	Yes	Total payment periods. For a 4-year monthly loan, use 4*12 or 48.
pmt	`Number`	Yes	Payment per period. Use negative values for cash outflows like loan payments.
fv	`Number`	No	Future value after final payment. Omit for loans (defaults to 0).
type	`Number`	No	Payment timing: 0=end of period (default), 1=beginning of period.

Using the PV Function

PV is perfect for determining how much to borrow today, how much to save monthly for a goal, or the current value of an income stream. Always match rate and nper units (monthly rate with monthly periods) and use consistent cash flow signs (negative for payments out, positive for receipts).

Common PV Examples

Monthly Loan Present Value

=PV(6%/12, 4*12, -250)

Amount you can borrow with $250 monthly payments at 6% annual interest over 4 years. Returns approx. $10,856.

Savings Plan with Future Value

=PV(5%/12, 20*12, -200, 50000)

Current savings needed for $50K goal in 20 years with $200 monthly contributions at 5% interest.

Annuity Payout Value

=PV(8%/12, 20*12, 500)

Present value of $500 monthly payments for 20 years at 8% interest. Returns approx. $59,777.

Frequently Asked Questions

Excel financial functions use sign convention: negative for cash outflows (your payments), positive for inflows (money received).

You must provide either PMT or FV, but not both omitted. PV solves for one variable when others are known.

Always consistent units! 10% annual loan with monthly payments = 10%/12 for rate, 48 for nper (4 years).

Common Errors and Solutions

#NUM! or #VALUE!

Cause: Rate and nper units mismatch, or invalid numbers

Solution: Verify rate=annual%/12 for monthly, nper=years*12

Wrong loan amount sign

Cause: Positive PMT for loan calculation

Solution: Use negative PMT (-250) for loan payments

Missing required arguments

Cause: Omitted rate, nper, or pmt

Solution: All three are required unless solving specifically

Notes

Part of Excel's annuity function family with PMT, FV, IPMT, PPMT
Cash flow sign convention: outflows negative, inflows positive
Available since Excel 2007 across all versions
Perfect for 'how much can I borrow?' scenarios

Compatibility

Available in: Excel 2007, Excel 2010, Excel 2013, Excel 2016, Excel 2019, Excel 2021, Microsoft 365

Not available in:

Content last reviewed: December 11, 2025
Update frequency: As needed
Excel versions tested: Excel 2007+