Format for Spreadsheet Functions on Excel©

Present worth: Contents of ( )

 PV(i%, n, A, F) for constant A series; single F value

 NPV(i%,second_cell:last_cell)  first_cell for varying cash flow series

Future worth:

 FV(i%, n, A, P) for constant A series; single P value

Annual worth:

 PMT(i%, n, P, F) for single amounts with no A series

 PMT(i%, n, NPV) to find AW from NPV; embed NPV function

Number of periods (years):

 NPER(i%, A, P, F) for constant A series; single P and F

(Note: The PV, FV, and PMT functions change the sense of the sign. Place a minus in front of the
function to retain the same sign.)

Rate of return:

 RATE(n, A, P, F) for constant A series; single P and F

 IRR(first_cell:last_cell) for varying cash flow series

Interest rate:

 EFFECT(r%, m) for nominal r, compounded m times per period

 NOMINAL(i%, m) for effective annual i, compounded m times

per year

Depreciation:

 SLN(P, S, n) straight line depreciation for each period

 DDB(P, S, n, t, d) double declining balance depreciation for

period t at rate d (optional)

 DB(P,S,n,t) declining balance, rate determined by the

function

 VBD(P,0, n,MAX(0, t1.5), MACRS depreciation for year t at rate d for

MIN(n, t0.5), d) DDB or DB method

Logical IF function:

 IF(logical_test,value_if_true,value_if_false) for logical two-branch operations

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108 CHAPTER 3 Interest Rate and Economic Equivalence

TABLE 3.4 Summary of Discrete Compounding Formulas with Discrete Payments

Factor Cash Flow

Flow Type Notation Formula Excel Command Diagram
S Compound F = P11 + i2N
I amount = FV1i, N, P,, 02 F
N (F/P, i, N) 0
G Present N
L worth P = F11 + i2-N = PV1i, N, F,, 02 F
E (P/F, i, N)
E Compound 11 + i2N - 1
Q amount F = Ac d = PV1i, N, A,, 02
i
U (F/A, i, N)
A F
0 1 2 3 N1
L N

P Sinking = PMT1i, N, P, F, 02 AAA AA

A = Fc d
i
11 + i2N - 1
A fund
Y (A/F, i, N)
M
E
N
T Present 11 + i2N - 1
worth P = Ac d = PV1i, N, A,, 02
(P/A, i, N) i11 + i2N AAA AA
S
E 1 2 3 N1N
R Capital i11 + i2N
d
11 + i2N - 1
I recovery A = Pc = PMT1i, N,, P2
E (A/P, i, N)
S

G Linear
R gradient
A 11 + i2N - iN - 1
d
(N2)G
i 11 + i2
D Present P = Gc 2 N 2G
I worth G
E (P/G, i, N)
11 + i2N - iN - 1
N 1 23 N1N
T Conversion factor A = Gc d P
i[11 + i2N - 1]
(A/G, i, N)

S Geometric
E gradient 1 - 11 + g2N11 + i2-N A1(1g)N1
R A1 c d A3
i - g A2
I Present P = D A1
A1 a b1if i = g2
worth N
E
S 1P/A 1, g, i, N2 1 + i 123 N
P