The Islamia University of Bahawalpur

Subject: MS Office and Application

Semester: BBA (Hons) 1st
Submitted to: Sir Mohsin Mateen
Submitted by:
 Hammad Shah
F21BMGMT1M01091
 Bilal Rafiq
F21BMGMT1M01055
 Zia Ur Rehman Khan
F21BMGMT1M01094
 Shahzad Aziz
F21BMGMT1M01023
 Ahmad Bhatti
F21BMGMT1M01011
 Ziyad Tariq
F21BMGMT1M01140
 Fareeha Arshad
F21BMGMT1M01012
 Ayesha Shahid
F21BMGMT1M01024
 Areeba Shakeel
F21BMGMT1M01052
 Topic: Finance Formula
Define
The excel financial functions have been made available to execute a
variety of financial calculations, including calculations of yield,
investment valuations, interest rates, internal rate of return, asset
depreciation, and payments.
 Syntax
=Fv(rate,nper,pmt,[pv],[type])
PV: Present Value

It indicates or calculates of investment the present value based upon

series of future payments.
=pv(rate,nper,pmt,[fv],[type])
o If you want to find out the future value of a particular investment which has a
constant interest rate and periodic payment, use the following formula –

FV (Rate, Nper, [Pmt], PV, [Type])

 Rate = It is the interest rate/period

 Nper = Number of periods
 [Pmt] = Payment/period
 PV = Present Value
 [Type] = When the payment is made (if nothing is mentioned, it’s
assumed that the payment has been made at the end of the period)
 Function And Examples of Finance Formula
1.PMT 2.IPMT 3.PPMT
4.PV 5.FV 6.RATE
1. PMT Function
The Excel PMT function is a financial function that calculates the
payment for a loan based on a constant interest rate, the number of
periods and the loan amount. "PMT" stands for "payment", hence the
function's name.
Syntax:
PMT(rate, nper, pv, [fv], [type])

Where:
Rate (required) - the constant interest rate per period. Can be supplied as percentage or
decimal number.

 Nper (required) - the number of payments for the loan, i.e. the total number of periods over
which the loan should be paid.
 Pv (required) - the present value.
 Fv (optional) - the future value, or the cash balance you wish to have after the last payment
is made. If omitted, the future value of the loan is assumed to be zero (0).
 Type (optional) - specifies when the payments are due:
Example:
For example, if you are applying for a two-year car loan with an annual interest rate of 7%
and the loan amount of $30,000, a PMT formula can tell you what your monthly payments
will be.
For the PMT function to work correctly in your worksheets, please keep in mind these facts:

2. IPMT Function
The IPMT function is a built-in function in Excel that is categorized as
a Financial Function. It can be used as a worksheet function (WS) and a
VBA function (VBA) in Excel. 
Syntax
The syntax for the IPMT function in Microsoft Excel is:

IPMT( interest_rate, period, number_payments, PV, [FV],

[Type] )

Parameters or Arguments
interest_rate:The interest rate for the investment.
Period:The period to calculate the interest rate. It must be a value between 1
and number_payments.
number_payments:The number of payments for the annuity.
PV:The present value of the payments.
FV:Optional. It is the future value that you'd like the investment to be after all payments have
been made. If this parameter is omitted, it will assume a FV of 0.
Type.Optional. It indicates when the payments are due. If the Type parameter is omitted, it
assumes a Type value of 0. Type can be one of the following values:

Valu
Explanation
e

0 Payments are due at the end of the period. (default)

1 Payments are due at the beginning of the period.

Returns
The IPMT function returns a numeric value.

Applies To
Excel for Office 365, Excel 2019, Excel 2016, Excel 2013, Excel 2011 for
Mac, Excel 2010, Excel 2007, Excel 2003, Excel XP, Excel 2000
 Type of Function

 Worksheet function (WS)

 VBA function (VBA)

Example
This first example returns the interest payment for a $5,000 investment that earns 7.5%
annually for 2 years. The interest payment is calculated for the 8th month and payments are due
at the end of each month.

 =IPMT(7.5%/12, 8, 2*12, 5000)

 Result: -$22.61

3. PPMT Function
This article describes the formula syntax and usage of the PPMT function in
Microsoft Excel.

Description

Returns the payment on the principal for a given period for an investment
based on periodic, constant payments and a constant interest rate.

Syntax

PPMT(rate, per, nper, pv, [fv], [type])

Note: For a more complete description of the arguments in PPMT, see PV.

The PPMT function syntax has the following arguments:

 Rate    Required. The interest rate per period.

 Per    Required. Specifies the period and must be in the range 1 to nper.
 Nper    Required. The total number of payment periods in an annuity.
 Pv    Required. The present value — the total amount that a series of future payments is worth
now.
 Fv    Optional. The future value, or a cash balance you want to attain after the last payment is
made. If fv is omitted, it is assumed to be 0 (zero), that is, the future value of a loan is 0.
 Type    Optional. The number 0 or 1 and indicates when payments are due.

Example

Copy the example data in the following table, and paste it in cell A1 of a new Excel
worksheet. For formulas to show results, select them, press F2, and then press
Enter. If you need to, you can adjust the column widths to see all the data.

Data Argument description

10% Annual interest rate

2 Number of years for the loan

$2,000.00 Amount of loan

Formula Description Result

=PPMT(A2/12, 1, A3*12, A4) Principal payment for month 1 of the loan ($75.62)
Data Argument description

8% Annual interest rate

10 Number of years for the loan

$200,000.00 Amount of loan

Formula Description (Result) Live Result

=PPMT(A8, A9, 10, A10) Principal payment for year 10 of the loan ($27,598.05)

4. PV Function
PV, one of the financial functions, calculates the present value of a loan or
an investment, based on a constant interest rate. 
Syntax
PV(rate, nper, pmt, [fv], [type])

 The PV function syntax has the following arguments:

 Rate    Required. The interest rate per period.
 Nper    Required. The total number of payment periods in an annuity.
  Pmt    Required. The payment made each period and cannot change over the life of the
annuity. Typically, pmt includes principal and interest but no other fees or taxes.
 Fv    Optional. The future value, or a cash balance you want to attain after the last
payment is made. 
 Type    Optional. The number 0 or 1 and indicates when payments are due.

Example
Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet.
For formulas to show results, select them, press F2, and then press Enter. If you need to, you
can adjust the column widths to see all the data.

Data Description
$500.000 Money paid out of an insurance annuity at the end of every
month.
8% Interest rate earned on the money paid out.
20 Years the money will be paid out.
Formula Description Result
=PV(A3/12, 12*A4, A2, , Present value of an annuity with the terms in A2:A4. ($59,777.15)
0)

5. FV Function
FV, one of the financial functions, calculates the future value of an investment based
on a constant interest rate. You can use FV with either periodic, constant payments,
or a single lump sum payment.
Syntax
FV(rate,nper,pmt,[pv],[type])

 Rate    Required. The interest rate per period.

 Nper    Required. The total number of payment periods in an annuity.
 Pmt    Required. The payment made each period; it cannot change over the life of the
annuity. 
 Pv    Optional. The present value, or the lump-sum amount that a series of future payments is
worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt
argument.
 Type    Optional. The number 0 or 1 and indicates when payments are due. If type is omitted, it
is assumed to be 0.

Example
Data Description
0.12 Annual interest rate
12 Number of payments
-1000 Amount of the payment
Formula Description Result
=FV(A2/12, A3, A4) Future value of an investment using the terms in A2:A4. $12,682.50

6. Rate Function
Returns the interest rate per period of an annuity. RATE is calculated by iteration and can have
zero or more solutions. If the successive results of RATE do not converge to within 0.0000001
after 20 iterations, RATE returns the #NUM! error value.
Syntax
RATE(nper, pmt, pv, [fv], [type], [guess])

 Nper    Required. The total number of payment periods in an annuity.

 Pmt    Required. The payment made each period and cannot change over the life of the annuity.
 Pv    Required. The present value — the total amount that a series of future payments is worth
now.
 Fv    Optional. The future value, or a cash balance you want to attain after the last payment is
made.
 Type    Optional. The number 0 or 1 and indicates when payments are due.

Example

Data Description
4 Years of the loan
-200 Monthly payment
8000 Amount of the loan
Formula Description Result
=RATE(A2*12, A3, Monthly rate of the loan with the terms entered 1%
A4) as arguments in A2:A4.
=RATE(A2*12, A3, Annual rate of the loan with the same terms. 9.24%
A4)*12
  Function and Examples Of Finance Formula

IPMT  
PMT  
LOAN 5000000
LOAN 5000000 RATE 10%
RATE 10% TENUR
TENURE 3 E 3
    IPMT (Rs41,666.67)
   
PMT (Rs161,335.94)

PPMT   FV  

LOAN 5000000 LOAN 5000000

RATE 10% RATE 10%
TENUR
TENURE 3
E 3
PPMT (Rs119,669.27) PV FV Rs6,740,909.21
LOAN 5000000
RATE 10%
TENURE 3

PV Rs5,000,000.00
RATE  

LOAN 5000000
RATE 10%
TENURE 3
1%
0.1 RATE