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xnpv with actual/360
How can I calculate the npv of a stream of monthly cashflows using the
actual/360 convention for compounding? Thanks Anand |
#2
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xnpv with actual/360
"Anand" wrote:
How can I calculate the npv of a stream of monthly cashflows using the actual/360 convention for compounding? I assume you are asking how to compute NPV with monthly cashflows and daily compounding. =NPV(FV(rate/360, 30,, -1) - 1, ...) where "rate" is the annual nominal rate. Thus, FV(...)-1 computes the effective monthly rate based on daily compounding. By the way, unless you "must" use 360, arguably a better estimate would be: =NPV(FV(rate/365, 365/12,, -1) -1, ...) But the "365" FV(...)-1 is almost the same as the "360" FV(...)-1 formatted as Percentage with 4 decimal places. |
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