pvfix

Present value with fixed periodic payments

Syntax

PresentVal = pvfix(Rate,NumPeriods,Payment)

PresentVal = pvfix(___,ExtraPayment,Due)

Description

PresentVal = pvfix(Rate,NumPeriods,Payment) computes the present value of a series of equal payments.

PresentVal = pvfix(___,ExtraPayment,Due) adds optional arguments.

Examples

Calculate the Present Value of a Series of Equal Payments

This example shows how to return the present value of a series of equal payments, where $200 is paid monthly into a savings account earning 6%. The payments are made at the end of the month for five years.

PresentVal = pvfix(0.06/12, 5*12, 200, 0, 0)

PresentVal = 
1.0345e+04

Input Arguments

Rate — Periodic interest rate

decimal

Periodic interest rate, specified as a decimal.

Data Types: double

NumPeriods — Number of periods

integer

Number of periods, specified as an integer.

Data Types: double

Payment — Periodic payment

numeric

Periodic payment., specified as a numeric.

Data Types: double

ExtraPayment — Payment received other than Payment in the last period

0 (default) | numeric

(Optional) Payment received other than Payment in the last period, specified as a numeric.

Data Types: double

Due — Indicator for when payments are due

0 (default) | logical with value of 1 or 0

(Optional) Indicator for when payments are due, specified as a logical with a value of 0 = end of period (default), or 1 = beginning of period.

Data Types: logical

Output Arguments

PresentVal — Present value

numeric

Present value, returned as a series of equal payments.

More About

Present Value

Present value is a fundamental financial concept that refers to the current worth of a sum of money or a stream of cash flows that will be received or paid in the future, discounted at a specific interest rate.

The idea behind present value is that a certain amount of money today is worth more than the same amount in the future due to its potential earning capacity. This concept is crucial in finance for valuing investments, making financial decisions, and assessing the worth of future cash flows.

Version History

Introduced before R2006a