How do I manually calculate this formula PV(P3/1200,Q3,-N3*M3/100

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G

Guest

I am trying to figure out this formula to determine Present Value for Letters
of Credit issued to borrowers
 
You would calculate the PV of each individual cash flow, and add them up.
Ex: the PV of the first cash flow is N3*M3/100 (the payment) divided by
(1+P3/1200)^1 (the one-period discount). For the second cash flow, the
exponent on the discount would be 2, and so on, for all Q3 periods
(presumably that's Q3 months, based on the way this is set up).
 
The interest related functions of Excel all belong to one family with one
basic equation.
Some functions (invisibly) use iteration to get results.
The basic equation is well described in HELP.
 
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