Discounting a series
This will calculate: if an investment pays in equal periodic installments, how much to pay for it today to earn a desired return.
Example: I would like to borrow money from you today and pay you back in equal monthly installments of $450 for 3 years. How much will you loan me if you want a 12% rate of return?
Please note: the result is a negative number because it is a cash outlay.
Prefer to let the site do the arithmetic? Use the discounting a series form.
- HP-12C keystrokes
- 1 3 g n
- 2 12 g i
- 3 450 PMT
- 4 PV = -13,548.38
g is the blue shift key — press it immediately before n or i to enter the term in months rather than years.