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Financial Formulas in Excel
There are many financial formulas in Excel that allow you to do very complex operations. The most useful ones are nevertheless the ones you use in your daily life like for exemple how to calculate the repayments of a loan.
The formula PMT(rate, Nper, Pv, Fv, Type). See explanation in the picture.
The interest rate is the interest rate on one period. Therefore, in the example you can see the interest of the bank is divided by 12 months.
Another interesting formula is the FV formula. FV stands for future value.
FV(rate, Nper, Pv, Fv, Type)
If you make monthly payment at the ban,k this is what you have to use. The rate is your annual interest rate divided by 12.
Exemple: FV(6/12,12,-1000,0,1) = $12397.24
See how the $1000 is negatif. This is because you take it out of your valet and put it in the bank.
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Updated December 29th, 2010
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