Top 5 Financial Functions in Excel…

financial functions in excel

Introduction to Excel Financial Functions

Financial functions in Excel 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, payments and more.

financial functions in excel

Today we are going to look at 5 most frequently used financial functions that are illustrated in the table below.

Present Value (PV)

  • PV helps you to find the present value of money.
  • PV(Rate, Nper, Pmt, Fv), where:
  • Rate – interest rate;
  • Nper – the number of periods;
  • Pmt – payment;
  • Fv – future value
financial functions in excel
financial functions in excel

Let’s find PV (present value of money) for this question on the screen.


$2.92 Million is the PV of $7 Million in 5 years, which means that in order to get $7M in 5 years, you have to have $2.92M now.

Interest Rate Calculation (RATE)

RATE function calculates the interest rate required to pay off a loan or to reach a target amount on investment, over a given period.

  • RATE(Nper, Pmt, PV, FV), where:
  • Nper – the number of periods;
  • Pmt – payment;
  • PV – present value;
  • Fv – future value
financial functions in excel
financial functions in excel

Let’s find RATE for this question on the screen.


As you can see from the answer we’ve got, you need 6% of the interest rate on your investment in order to get $7 million in 5 years.

Internal Rate of Return (IRR)

Internal Rate of Return is a metric used in capital budgeting to estimate the profitability of potential investments.

financial functions in excel
financial functions in excel

Let’s take a look at our example below.


So, 23% is the rate of return on $45,000 investment that you would receive in 5 years – definitely worth buying this software.

Net Present Value (NPV)

Net Present Value (NPV) is the calculation used to find today’s value of a future stream of payments.

  • NPV(Rate,Value1,Value2,…), where:
  • Rate – Interest Rate;
  • Value 1, Value 2, etc. – Cash Flows over the years
financial functions in excel
financial functions in excel

In our example, the net present value is $34.36, which is the current value of the 4 years cash flow.

Payment (PMT)

PMT is used to get the periodic payment of the loan.

  • PMT(Rate,Nper,Pv,Fv), where:
  • Rate – interest rate;
  • Nper – number of periods;
  • Pv – present value;
  • Fv – future value.
financial functions in excel
financial functions in excel

Let’s find PMT for this question on the screen.


As you can see, $1,186.98 is the annual payment you need to make to pay off the $5,000 loan in 5 years.

Excel Financial Functions List

A list of Excel Financial Functions is provided below for your reference:

  • Investment value functions including FV, FVSCHEDULE, NPV, PV, RECEIVED, XNPV.
  • The internal rate of return functions including IRR, MIRR, XIRR.
  • Asset depreciation functions including AMORDEGRC, AMORLINC, DB, DDB, SLN, SYD, VDB.
  • Payment functions including: CUMIPMT, CUMPRINC, IPMT, ISPMT, PMT, PPMT.
  • Dollar conversion including: DOLLARDE, DOLLARFR.
  • Yield functions including YIELD, YIELDDISC, YIELDMAT, ODDFYIELD, ODDLYIELD, TBILLEO, TBILLYIELD.
  • Price functions including: PRICE, PRICEDISC, PRICEMAT, ODDFPRICE, ODDLPRICE, TBILLPRICE.

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