Which formula should I use to look for the present value factor if I have the interest rate and the # of periods. Please see attached file.
Thanks in advance
Which formula should I use to look for the present value factor if I have the interest rate and the # of periods. Please see attached file.
Thanks in advance
Re: Formula For Pv Factor
Do you have the payment made each period?
Re: Formula For Pv Factor
Yes, the payments are on the attached.
Tks
Re: Formula For Pv Factor
So for the first row is this correct?
Interest Rate = 5%
No of periods will be = 12 as its 30/06/02007 - 30/06/2008
Payment per month = 846,540.92
Is that correct?
Re: Formula For Pv Factor
What is the mathematical formula to get this factor?
Re: Formula For Pv Factor
Quote from ByTheCringe2What is the mathematical formula to get this factor?
It appears to be E column / C column. Which doesnt really make sense? :confused:
Anyway that means you need to calculate the present value which is why I asked the questions above. i think I may be off track tho.
More details would be nice.
Re: Formula For Pv Factor
enter the following formula in J7 and copy down:
J7: =ROUND(1/(1+$J$4)^$G7,4)
filippo
Re: Formula For Pv Factor
The formula worked.
Thanks
Re: Formula For Pv Factor
Reafidy,
-concerning the round is because the data mgiv provided had only 4 digits
-concerning the formula, it depends: up to one/one and a half years, it's normally used the simple actualization, that is = C / (1 + r% * dt ) ( they are normaly deposit rates calculated normally on a ACT/360 day basis ); above the one year mark ( market convention ) one normally switch to a compound actualization = C * (1 + r% )^t, because you assume the capital to be reinvested at same rate for the time t ( day convention: ACT/ACT, 30/360, etc. ) which actually is not the case, but it's easy and fast to calculate ( basically it assumes a flat yield curve ). Normally in financial markets on the base of deposit, futures and swap rates, one calculate a zero curve ( with the bootstrapping method ) and from there a REAL the discount curve, for each maturity.
having that you can calculate the pv any of your investments.
filippo
Re: Formula For Pv Factor
Oh, that formula, LOL ::D
Re: Formula For Pv Factor
Quote from filo65Reafidy,
-concerning the round is because the data mgiv provided had only 4 digits
-concerning the formula, it depends: up to one/one and a half years, it's normally used the simple actualization, that is = C / (1 + r% * dt ) ( they are normaly deposit rates calculated normally on a ACT/360 day basis ); above the one year mark ( market convention ) one normally switch to a compound actualization = C * (1 + r% )^t, because you assume the capital to be reinvested at same rate for the time t ( day convention: ACT/ACT, 30/360, etc. ) which actually is not the case, but it's easy and fast to calculate ( basically it assumes a flat yield curve ). Normally in financial markets on the base of deposit, futures and swap rates, one calculate a zero curve ( with the bootstrapping method ) and from there a REAL the discount curve, for each maturity.
having that you can calculate the pv any of your investments.
filippo
Thanks Filo, crystal clear.
Don’t have an account yet? Register yourself now and be a part of our community!