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#1
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Present value of an annuity
I copied the example given in Help to a fresh worksheet and put in the
monthly payment, interest rate and duration. Please tell me what should I do to get the calculations made and posted in the worksheet? |
#2
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Present value of an annuity
Hi,
Let's say you have in column A row 2 the annual interest, row 3 Number of payments and in row 4 Amount of Loan, then enter this formula =PMT(A2/12, A3, A4) Hope this helps "sleeplessinnewjersey" wrote: I copied the example given in Help to a fresh worksheet and put in the monthly payment, interest rate and duration. Please tell me what should I do to get the calculations made and posted in the worksheet? |
#3
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Present value of an annuity
On Jan 21, 8:13*am, sleeplessinnewjersey
wrote: I copied the example given in Help to a fresh worksheet and put in the monthly payment, interest rate and duration. *Please tell me what should I do to get the calculations made and posted in the worksheet? The best way to get assistance is to post the formula that you are using and its results. You do not even say what is wrong. Klunk! Also, repeat the subject of your question in the text body of your posting. The following may or may not be helpful, since I am only making guesses about the context of your question. Your subject line says "present value". So ass-u-me you are using the PV() function. Keep in mind that inflows and outflows must have different signs (one negative; the other positive), and that interest rate and duration must be in the same units as the periodic payment. If you are using monthly payment, annual interest rate must be converted to a monthly rate, and duration in years must be multiplied by 12. For example, consider an annuity that pays $1000 per month with zero balance after 20 years and an average investment growth rate of 4% per year. Most people would compute the present value as follows: =pv(4%/12, 20*12, 1000) (Change the formula to =-pv(...) if you prefer a non-negative result. Alternatively, you could write -1000 instead of 1000.) But for an investment, assuming that 4% is the APY, I would replace "4%/12" with the monthly compounded rate, namely: rate(12, 0, -1, 1+4%). Does that help at all? |
#4
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Present value of an annuity
Thanks for your reply. I'm a bit confused, however. Shouldn't the monthly
payment figure in this formula? "Eduardo" wrote: Hi, Let's say you have in column A row 2 the annual interest, row 3 Number of payments and in row 4 Amount of Loan, then enter this formula =PMT(A2/12, A3, A4) Hope this helps "sleeplessinnewjersey" wrote: I copied the example given in Help to a fresh worksheet and put in the monthly payment, interest rate and duration. Please tell me what should I do to get the calculations made and posted in the worksheet? |
#5
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Present value of an annuity
Thanks for your help with both of my questions
"joeu2004" wrote: On Jan 21, 8:13 am, sleeplessinnewjersey wrote: I copied the example given in Help to a fresh worksheet and put in the monthly payment, interest rate and duration. Please tell me what should I do to get the calculations made and posted in the worksheet? The best way to get assistance is to post the formula that you are using and its results. You do not even say what is wrong. Klunk! Also, repeat the subject of your question in the text body of your posting. The following may or may not be helpful, since I am only making guesses about the context of your question. Your subject line says "present value". So ass-u-me you are using the PV() function. Keep in mind that inflows and outflows must have different signs (one negative; the other positive), and that interest rate and duration must be in the same units as the periodic payment. If you are using monthly payment, annual interest rate must be converted to a monthly rate, and duration in years must be multiplied by 12. For example, consider an annuity that pays $1000 per month with zero balance after 20 years and an average investment growth rate of 4% per year. Most people would compute the present value as follows: =pv(4%/12, 20*12, 1000) (Change the formula to =-pv(...) if you prefer a non-negative result. Alternatively, you could write -1000 instead of 1000.) But for an investment, assuming that 4% is the APY, I would replace "4%/12" with the monthly compounded rate, namely: rate(12, 0, -1, 1+4%). Does that help at all? |
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