Do you have the payment made each period?
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Which formula should I use to look for the present value factor if I have the interest rate and the # of periods. Please see attached file.
Thanks in advance
Do you have the payment made each period?
Yes, the payments are on the attached.
Tks
So for the first row is this correct?
Interest Rate = 5%
No of periods will be = 12 as its 30/06/02007 - 30/06/2008
Payment per month = 846,540.92
Is that correct?
What is the mathematical formula to get this factor?
It appears to be E column / C column. Which doesnt really make sense?Originally Posted by ByTheCringe2
Anyway that means you need to calculate the present value which is why I asked the questions above. i think I may be off track tho.
More details would be nice.
enter the following formula in J7 and copy down:
J7: =ROUND(1/(1+$J$4)^$G7,4)
filippo
The formula worked.
Thanks
Well done, howd you come up with that?Originally Posted by filo65
Reafidy,
-concerning the round is because the data mgiv provided had only 4 digits
-concerning the formula, it depends: up to one/one and a half years, it's normally used the simple actualization, that is = C / (1 + r% * dt ) ( they are normaly deposit rates calculated normally on a ACT/360 day basis ); above the one year mark ( market convention ) one normally switch to a compound actualization = C * (1 + r% )^t, because you assume the capital to be reinvested at same rate for the time t ( day convention: ACT/ACT, 30/360, etc. ) which actually is not the case, but it's easy and fast to calculate ( basically it assumes a flat yield curve ). Normally in financial markets on the base of deposit, futures and swap rates, one calculate a zero curve ( with the bootstrapping method ) and from there a REAL the discount curve, for each maturity.
having that you can calculate the pv any of your investments.
filippo
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