Present value of uneven stream of payments

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hedgeman50

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Sep 20, 2002
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I need to calculate the present value of 360 uneven payments (30-year mortgage). Years one through five would be $1x, years six through 10 would be 1.5x, years 11 through 15 would be $1.8x, and so on.

How can I create a calculation that takes the future payments in cells A1 through A360 and discounts those back at a given discount rate?

This is very easy to do with a financial calculator, but I can't seem to figure it out in Excel. Any help is appreciated!

Hedgeman50
 

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I'll give XNPV a try. I need to bring my Office XP disk to the office tomorrow to install the Analysis ToolPak to use XNPV. Thanks.
 
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You could do it using the plain NPV function (no analysis toolpak needed) if you first convert your discount rate from an annual rate to a monthly rate before inputting that into the NPV formula and applying to the monthly cashflow.

To convert the discount rate you would just do (1+r)^(1/12)-1 where r is the annual discount rate.

The implicit assumption is that the cashflows are evenly spaced at monthly intervals and are in arrear ie the first cashflow takes place at the end of month 1.
 
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Thanks

I just used the NPV function and changed the annual rate to a monthly rate. Thanks for the help!
 
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