Hi Tom!
Use the PV function:
=PV(6%/12,20*12,-1000,0,0)
Returns: 139580.771682927
Assumptions: I've assumed an APR12 of 6% and a term of 20 years. Also
assumed that it is a fully redeeming mortgage with the first payment
due 1 month after the loan is drawn and thereafter monthly. Assumed
payment is $1000
Since I have an APR(12) the rate is 6%/12.
Term is 20*12 [It's important that the periodicity of term matches the
periodicity of the rate]
Affordable payment is -1000 per month which is expressed as a negative
because it is a payment out. [Again it's important that the
periodicity of the payment matches the periodicity of the rate and
term]
Fully redeeming loan with no balloon element means the FV is 0.
Since first payment is made one month after draw down, the Type is 0.
The return indicates a positive right to receive the loan amount.
--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
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