PV Function 

  • Article

Returns a Double specifying the present value of an annuity based on periodic, fixed payments to be paid in the future and a fixed interest rate.

Function PV( _
   ByVal Rate As Double, _
   ByVal NPer As Double, _
   ByVal Pmt As Double, _
   Optional ByVal FV As Double = 0, _
   Optional ByVal Due As DueDate = DueDate.EndOfPeriod _
) As Double

Parameters

  • Rate
    Required. Double specifies the interest rate per period. For example, if you get a car loan at an annual percentage rate (APR) of 10 percent and make monthly payments, the rate per period is 0.1/12, or 0.0083.
  • NPer
    Required. Double specifies the total number of payment periods in the annuity. For example, if you make monthly payments on a four-year car loan, your loan has 4 x 12 (or 48) payment periods.
  • Pmt
    Required. Double specifies the payment to be made each period. Payments usually contain principal and interest that does not change during the life of the annuity.
  • FV
    Optional. Double specifies the future value or cash balance you want after you make the final payment. For example, the future value of a loan is $0 because that is its value after the final payment. However, if you want to save $50,000 over 18 years for your child's education, then $50,000 is the future value. If omitted, 0 is assumed.
  • Due
    Optional. Object of type DueDate Enumeration that specifies when payments are due. This argument must be either DueDate.EndOfPeriod if payments are due at the end of the payment period, or DueDate.BegOfPeriod if payments are due at the beginning of the period. If omitted, DueDate.EndOfPeriod is assumed.

Remarks

An annuity is a series of fixed cash payments made over a period of time. An annuity can be a loan (such as a home mortgage) or an investment (such as a monthly savings plan).

The Rate and NPer arguments must be calculated using payment periods expressed in the same units. For example, if Rate is calculated using months, NPer must also be calculated using months.

For all arguments, cash paid out (such as deposits to savings) is represented by negative numbers; cash received (such as dividend checks) is represented by positive numbers.

Example

In this example, the PV function returns the present value of an $1,000,000 annuity that will provide $50,000 a year for the next 20 years. Provided are the expected annual percentage rate (APR), the total number of payments (TotPmts), the amount of each payment (YrIncome), the total future value of the investment (FVal), and a number that indicates whether each payment is made at the beginning or end of the payment period (PayType). Note that YrIncome is a negative number because it represents cash paid out from the annuity each year.

Sub TestPV()
    ' Define money format.
    Dim Fmt As String = "###,##0.00"
    ' Annual percentage rate.
    Dim APR As Double = 0.0825
    ' Total number of payments.
    Dim TotPmts As Double = 20
    ' Yearly income.
    Dim YrIncome As Double = 50000
    ' Future value.
    Dim FVal As Double = 1000000
    ' Payment at beginning of month.
    Dim PayType As DueDate = DueDate.BegOfPeriod
    Dim PVal As Double = PV(APR, TotPmts, -YrIncome, FVal, PayType)
    MsgBox("The present value is " & Format(PVal, Fmt) & ".")
End Sub

Requirements

Namespace: Microsoft.VisualBasic

Module: Financial

Assembly: Visual Basic Runtime Library (in Microsoft.VisualBasic.dll)

See Also

Reference

Financial Summary