Function for interest rate over several years
I've been trying to get my excel 2000 to help me with caculating the total
sum that I need to pay today instead of paying a premium each month for 60 months if you take the interest rate of 3 per cent/year away. I'm not sure that this is called in english but anyway the whole lumpsum today times the interes rate for 5 years is more then the total sum you get when you devide the payment up in 60 months with interest rate. What I need to calculate is what the lumpsum should be today if I want it to be the same total after 5 years as the one with monthly payment for 60 months and what function I use for that. Please ask me if you think I am being a bit unclear here and I´ll try to explain better... -- Hmmm |
Function for interest rate over several years
It's call the Present Value, and Excel has a PV function for this purpose.
If, for example, you are paying $50/month for 5 years at 3%/year interest, the PV is calculated as =PV(3%/12,60,-50). (Note that you use 3%/12 and 5*12 months to reflect the monthly payments). "Ozborne787" wrote: I've been trying to get my excel 2000 to help me with caculating the total sum that I need to pay today instead of paying a premium each month for 60 months if you take the interest rate of 3 per cent/year away. I'm not sure that this is called in english but anyway the whole lumpsum today times the interes rate for 5 years is more then the total sum you get when you devide the payment up in 60 months with interest rate. What I need to calculate is what the lumpsum should be today if I want it to be the same total after 5 years as the one with monthly payment for 60 months and what function I use for that. Please ask me if you think I am being a bit unclear here and I´ll try to explain better... -- Hmmm |
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