Present Value using the PMT Function

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New Contributor

Hi there, I'm clearly out of my league on this one. I'm trying to calculate the total price of a property / present value (this is the variable) knowing everything else. I was thinking of using the PMT (rate, nper, pvfunction but I'm stumped here. I don't know how to calculate the present value using this or any other formula when the variable is pv. I have other data related to the property IF that's necessary. What I'm trying to do is decide what's the right price knowing the rent, service charges and everything else about the property. Can you help?

3 Replies
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@redblasko 

There are other functions that solve for different unknowns.  It may be that

= PV( rate, nper, -pmnt)

is more relevant.

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@Peter Bartholomew that's a good idea. Unfortunately, I don't know also the pmnt of the property. Since that's also linked to the property's price. I've thought of looking at the basic mortgage calculation formula. and extrapolate the price of the property from there. I have the property's cash flow and all other running costs. And I have the rent (which is the income). The variable is the property's price. 

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@redblasko 

Perhaps the starting point should not be 'what function do I need?'.

 

If, instead, you start by building the expenditure and cash flows period by period then that might help formulate the problem.  The finance functions link the results to the assumptions more immediately but watching the effect develop over time might give more insight to help you understand the implications of the assumptions and develop your requirements.