Apple iWork '09 User Manual
Page 143
Chapter 6
Financial Functions
143
Example 2
In this example, you are presented with an investment opportunity. The opportunity is to invest in
a discount security today and then pay or receive nothing further until the security matures. The
discount security matures in 14 years and has a redemption value of $100,000. Your alternative is to
leave your money in your money market savings account where it is expected to earn an annual
yield of 5.25%.
Using the PV function, you can determine the maximum amount you should be willing to pay for this
discount security today, assuming you want at least as good an interest rate as you expect to get on
your money market account. Based on the assumptions given, it would be –$48,852.92 (the function
returns a negative amount since this is a cash outflow).
periodic-rate
num-periods
payment
future-value
when-due
=PV(B2, C2, D2,
E2, F2)
0.0525
14
0
100000
1
Related Topics
For related functions and additional information, see:
“Choosing Which Time Value of Money Function to Use” on page 348
“Common Arguments Used in Financial Functions” on page 341
“Listing of Financial Functions” on page 96
“Value Types” on page 36
“The Elements of Formulas” on page 15
“Using the Keyboard and Mouse to Create and Edit Formulas” on page 26
“Pasting from Examples in Help” on page 41