How do I calculate present value of a single sum?
 

Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

=future_payment/((1+r)^n)
where r is the rate of interest and n is the number of periods.

for instance present value of 120 three years from today = 120/1.03^3 =
109.81
"Carmen" wrote in message
...
Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to
calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

Is this something in one of the add-in packages? I tried the formula and it
gives me a #NAME? error.

Thanks for your help!

"N Harkawat" wrote:

=future_payment/((1+r)^n)
where r is the rate of interest and n is the number of periods.

for instance present value of 120 three years from today = 120/1.03^3 =
109.81
"Carmen" wrote in message
...
Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to
calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

What I mean by Future_payment is the cell which holds the future value
so your formula really should have been

=A1/(1+B1)^C1

where cell A1 = future_payment
B1 = rate of interest per period
C1 = number of periods

There is as such no formula for the PV for a single cash flow


"Carmen" wrote in message
...
Is this something in one of the add-in packages? I tried the formula and
it
gives me a #NAME? error.

Thanks for your help!

"N Harkawat" wrote:

=future_payment/((1+r)^n)
where r is the rate of interest and n is the number of periods.

for instance present value of 120 three years from today = 120/1.03^3 =
109.81
"Carmen" wrote in message
...
Excel has a built in formula for calculating present value of an
annuity
(series of payments), but I am looking forward to finding a way to
calcuate
present value of a single sum (such as a note that accrues interest but
is
only paid at the end of the period - therefore only paid once).

Thanks

You are referring to the NPV() function. Take a look at the PV() function
instead, and remember that your result will have a sign opposite of the one
you give the final payment. So...if you expect to receive a $100 payment in
5 years, you will get a negative result, indicating what you'd have to pay
OUT today to get that $100.

Duke


"Carmen" wrote:

Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

This doesn't work either, already tried that.

"Duke Carey" wrote:

You are referring to the NPV() function. Take a look at the PV() function
instead, and remember that your result will have a sign opposite of the one
you give the final payment. So...if you expect to receive a $100 payment in
5 years, you will get a negative result, indicating what you'd have to pay
OUT today to get that $100.

Duke


"Carmen" wrote:

Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

Thanks, that gave me what I needed.

"N Harkawat" wrote:

What I mean by Future_payment is the cell which holds the future value
so your formula really should have been

=A1/(1+B1)^C1

where cell A1 = future_payment
B1 = rate of interest per period
C1 = number of periods

There is as such no formula for the PV for a single cash flow


"Carmen" wrote in message
...
Is this something in one of the add-in packages? I tried the formula and
it
gives me a #NAME? error.

Thanks for your help!

"N Harkawat" wrote:

=future_payment/((1+r)^n)
where r is the rate of interest and n is the number of periods.

for instance present value of 120 three years from today = 120/1.03^3 =
109.81
"Carmen" wrote in message
...
Excel has a built in formula for calculating present value of an
annuity
(series of payments), but I am looking forward to finding a way to
calcuate
present value of a single sum (such as a note that accrues interest but
is
only paid at the end of the period - therefore only paid once).

Thanks

Carmen -

Not sure what you mean by it "doesn't work either."

It works fine on my PC. Are you suggesting you get an error, an erroneous
result, or something else entirely?

Are you posing your question here - and in Excel - accurately?



"Carmen" wrote:

This doesn't work either, already tried that.

"Duke Carey" wrote:

You are referring to the NPV() function. Take a look at the PV() function
instead, and remember that your result will have a sign opposite of the one
you give the final payment. So...if you expect to receive a $100 payment in
5 years, you will get a negative result, indicating what you'd have to pay
OUT today to get that $100.

Duke


"Carmen" wrote:

Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

It doesn't calculate the answer that I am looking for. Someone else already
responded with a formula that does what I need, thanks for your help though.

"Duke Carey" wrote:

Carmen -

Not sure what you mean by it "doesn't work either."

It works fine on my PC. Are you suggesting you get an error, an erroneous
result, or something else entirely?

Are you posing your question here - and in Excel - accurately?



"Carmen" wrote:

This doesn't work either, already tried that.

"Duke Carey" wrote:

You are referring to the NPV() function. Take a look at the PV() function
instead, and remember that your result will have a sign opposite of the one
you give the final payment. So...if you expect to receive a $100 payment in
5 years, you will get a negative result, indicating what you'd have to pay
OUT today to get that $100.

Duke


"Carmen" wrote:

Excel has a built in formula for calculating present value of an annuity
(series of payments), but I am looking forward to finding a way to calcuate
present value of a single sum (such as a note that accrues interest but is
only paid at the end of the period - therefore only paid once).

Thanks

"There is as such no formula for the PV for a single cash flow"

=PV(0.03,3,,-120) = 109.82

"N Harkawat" wrote:

What I mean by Future_payment is the cell which holds the future value
so your formula really should have been

=A1/(1+B1)^C1

where cell A1 = future_payment
B1 = rate of interest per period
C1 = number of periods

There is as such no formula for the PV for a single cash flow


"Carmen" wrote in message
...
Is this something in one of the add-in packages? I tried the formula and
it
gives me a #NAME? error.

Thanks for your help!

"N Harkawat" wrote:

=future_payment/((1+r)^n)
where r is the rate of interest and n is the number of periods.

for instance present value of 120 three years from today = 120/1.03^3 =
109.81
"Carmen" wrote in message
...
Excel has a built in formula for calculating present value of an
annuity
(series of payments), but I am looking forward to finding a way to
calcuate
present value of a single sum (such as a note that accrues interest but
is
only paid at the end of the period - therefore only paid once).

Thanks