Format for Spreadsheet Functions on Excel© Relations for Discrete Cash Flows with End-of-Period Compounding

Present worth: Contents of ( ) Factor Notation Sample Cash Flow

Type Find/Given and Formula Relation Diagram
 PV(i%, n, A, F) for constant A series; single F value
F兾P (F兾P,i,n)  (1  i)n F  P(F兾P,i,n) F
 NPV(i%,second_cell:last_cell)  first_cell for varying cash flow series Compound
Single amount 0 1 2 n–1
Future worth: …
Amount 1 n
P兾F (P兾F,i,n)  n P  F(P兾F,i,n)
(1  i)
 FV(i%, n, A, P) for constant A series; single P value Present
worth (Sec. 2.1) P
Annual worth:
(1  i)n  1
P兾A (P兾A,i,n)   P  A(P兾A,i,n) A A … A A
 PMT(i%, n, P, F) for single amounts with no A series i(1  i)n
Present
 PMT(i%, n, NPV) to find AW from NPV; embed NPV function worth 0
…
i(1  i)n
Number of periods (years): A兾P (A兾P,i,n)   A  P(A兾P,i,n) 1 2 n–1 n
(1  i)n  1
Capital
P
 NPER(i%, A, P, F) for constant A series; single P and F Uniform recovery (Sec. 2.2)
Series
(1  i)n  1
(Note: The PV, FV, and PMT functions change the sense of the sign. Place a minus in front of the F兾A (F兾A,i,n)   F  A(F兾A,i,n) F
i
function to retain the same sign.) Compound
0 1 2 n–1 n
amount …
Rate of return: i
A兾F (A兾F,i,n)   A  F(A兾F,i,n)
(1  i)n  1
 RATE(n, A, P, F) for constant A series; single P and F Sinking
A A…A A
fund (Sec. 2.3)
 IRR(first_cell:last_cell) for varying cash flow series
(1  i)n  in  1 PG
PG兾G (P兾G,i,n)   PG  G(P兾G,i,n) AG AG AG … AG AG
Interest rate: i2(1  i)n
Present
 EFFECT(r%, m) for nominal r, compounded m times per period Arithmetic worth
Gradient …
1 n 0 1 2 3 n
 NOMINAL(i%, m) for effective annual i, compounded m times AG兾G (A兾G,i,n)     AG  G(A兾G,i,n) …
i (1  i)n  1 G 2G
per year Uniform
series (Gradient only) (Sec. 2.5) (n–1) G
Depreciation:

冦
[ ( 1g n
)]
n–1
A1(1+g)
 SLN(P, S, n) A1 1  ——— A1(1+g)
straight line depreciation for each period 1i A1 …
Geometric Pg兾A1 and g ——————— gi
Pg  ig
 DDB(P, S, n, t, d) double declining balance depreciation for Gradient Present
n 0
…
period t at rate d (optional) worth A1 ——— gi 1 2 n–1 n
1i

 DB(P,S,n,t) declining balance, rate determined by the (Gradient and base A1) (Sec. 2.6) Pg
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