Net Present Value

[Ian99099]

Does anyone have any thoughts please on a formula to calculate todays value of a single payment received in x years at an annual discount rate of y%?

NPV relies on a number of even payments where I have just a single payment but at a variable future date.

Thanks in anticipation!

Ian

[NeedForExcel]

Have you tried the =NPV function?

[Ian99099]

Have you tried the =NPV function?

Indeed I did but NPV needs a number of future sums at regular spacing. I have a single future sums but at variable single dates in the future.

[joeu2004]

Does anyone have any thoughts please on a formula to calculate todays value of a single payment received in x years at an annual discount rate of y%?

=PV(y%,x,0,-p)
or
=p / (1+y%)^x

where "p" is the single future payment received.

Note the use of -p in the PV function. That ensures that PV returns a positive value. It follows the convention of signed cash flows to distinguish inflows and outflows. Which sign is which direction is arbitrary, as long as we are consistent.

NPV relies on a number of even payments where I have just a single payment but at a variable future date.

Don't get too hung up on terminology. Net present value is simply the sum of the present values of future cash flows. So when you have one cash flow, the "net" present value is simply the (sum of) one present value.