Answer:
PV (rate, nper, payment, vf, type)
Rate is the interest rate per period. For example, if you get a loan for a car with an annual interest rate of 10 percent and make monthly payments, the monthly interest rate will be 10% / 12 or 0.83%. In the formula I would write 10% / 12, 0.83% or 0.0083 as the rate.
Nper is the total number of payment periods in an annuity. For example, if you get a four-year loan to buy a car and make monthly payments, the loan will have 4 * 12 (or 48) periods. The formula will have 48 as nper argument.
Payment is the payment made in each period, which cannot vary during the annuity. Generally, the payment argument includes capital and interest, but does not include any other duties or taxes. For example, the monthly payments on a $ 10,000 four-year loan with an interest rate of 12 percent for the purchase of a car are $ 263.33. In the formula I would write -263.33 as the payment argument. If the payment argument is omitted, the vf argument must be included.
Vf is the future value or a cash balance that you want to achieve after making the last payment. If the argument vf is omitted, the value is assumed to be 0 (for example, the future value of a loan is 0). If you want to save $ 50,000 to pay for a special project in 18 years, $ 50,000 would be the future value. In this way, it is possible to make a conservative estimate at a certain interest rate and determine the amount to be saved each month. If the vf argument is omitted, the paid argument must be included.
