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__Excel Formulas and Excel Functions__

__Excel Formulas and Excel Functions__

Excel Formulas & Excel Functions That Will Help You Solve Financial Problems |

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*Excel Formulas Solve Financial Problems.*

Many people see Excel as a tool that is only good for
business applications, but when you look at the simple and useful formulas
below, you will see that Excel will help you solve your financial problem. Can
do.

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*So let's see how you can do your financial calculations in
Microsoft Excel.*

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*1) Compare Any Loan Terms:*

O Are you going to get a new bike, car or house for yourself?
So you can get confused with many types of financial scheme and interest rate
and loan term of the bank.

Whenever you want to know about the actual monthly payment by
comparing any loan term and interest rate, take advantage of the powerful (and
simple) PMT formula.

The PMT function calculates the payment of a loan that has a
constant payment and a constant interest rate.

Syntax

= PMT (rate, nper, pv, [fv], [type])

Arguments

rate - The interest rate for a loan.

nper - The total number of payments for the loan.

pv - the current value, or now the total valuer of all loan
payments.

fv - [Optional] Future value after the last payment, or the
cash balance you want. 0 (zero) for the default.

type - [optional] When payments are due. 0 = end of period. 1
= beginning of period. The default is 0.

Example: Calculate Payment on Personal Loan

By using PMT function, you can know how much you have to pay
for the specific interest rate and the installment for the loan term.

For example, if you are taking 10,000 loans for 24 months
with an annual interest rate of 8 months, then PMT can tell you what your
monthly payment is.

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*Generic formula*

= PMT (rate, periods, -amount)

In the example shown, the formula in D3 is:

Excel Formulas & Excel Functions That Will Help You Solve Financial Problems |

= PMT (C3 / 12, B3, -A3)

As you can see, when you can compare multiple loan terms at
once, it brings out some realities.

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*2) FV - Future Value:*

V Do you want to invest your money in Fix of Deposit (FD)? So
this next formula can make your work easier.

With the help of this formula, you can compare the interest
rate of different banks and see how much money you can get after the period.

Excel's FV function is a financial function that shows the future
value of an investment. You can use the FV function to obtain the future value
of an investment, assuming a constant payment, along with the constant interest
rate.

an objective

To get the feature value of the investment.

Syntax

= FV (rate, nper, pmt, [pv], [type])

Arguments

rate - loan interest rate

nper - Number of payments (or investment period in months)

pmt - Paid in each period. (Usually monthly)

(This number must be entered negatively.)

pv - [Optional] If the current starting balance (optional) is
not, zero is considered. Must be entered as a negative number.

type - [optional] When payments are due. 0 = end of period, 1
= beginning of period. The default is 0.

For example, suppose you pay 1000 per month for 10 years at
an annual interest rate of 5%.

In the example shown, E3 has the formula:

Excel Formulas & Excel Functions That Will Help You Solve Financial Problems |

= FV (A3 / 12, B3, -C3, D3)

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*3) Calculate Required interest rate to grow:*

If you have cash, which you want to increase in the future,
then you can see in Exile what the interest required for it should be.

With the help of Excel's RRI function, you can calculate the
interest rate.

Note: The RRI function is only available in Excel 2013 and
beyond.

Suppose you have 10,000 rupees as on date, which you want to
increase to 25,000 after 5 years. So you will need so much rate of interest for
this?

Syntax

RRI (nper, pv, fv)

arguments

nper - investment period

pv - the current value of the investment.

fv - the future value of the investment.

The following spreadsheet Excel RRI function is used to
calculate the interest rate required for an investment of 10,000, so that its
value reaches 25000 over a period of 5 years.

Formula in cell B5 will be like this.

= RRI (B2, B3, B4)

The result of this formula is the quarterly rate. When it is
multiplied by 4 to translate into an annual rate, the answer is 0.2011x 4 = .08
or about 8%.

Excel Formulas & Excel Functions That Will Help You Solve Financial Problems |

__THANKS FOR ALL__
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