If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?

Question

How do I use the financial function in excel for this?

Answer 1

This question is answered with the present value function PV. There are five data inputs: Rate (0.09), Nper (8 for 8 years), Pmt (which you are not adding to so it's 0 here), FV or future value = 80000, and Type (does not apply here so use 0). You get a negative number from this, but it's the correct value of $40149.30.