The Excel NPV Function

Related Functions:
XNPV Function
PV Function

NPV Function Equation
The Excel NPV Function uses the following equation :

Excel NPV Equation

The Net Present Value is described in detail on the Wikipedia Net Present Value page

Basic Description

The Excel NPV function calculates the Net Present Value of an investment, based on a supplied discount rate, and a series of future payments and income.

The format of the function is :

NPV( rate, value1, [value2], [value3], ... )

Where the arguments are as follows :

rate - The discount rate over one period
value1, [value2], ... -

Numeric values, representing payments and income, where :

  • negative values are treated as payments
  • positive values are treated as income

Note that :

Also note that in Excel 2007, you can provide up to 254 payment and income values to the Npv function, but in Excel 2003, you can only provide up to 29 values.

Example of use of the Excel NPV Function

NPV Function Example

The above spreadsheet on the right shows an example of the NPV function. The data used is shown in cells A1 - A7 of the spreadsheet and the NPV function is shown in cell B10.

This function gives the result $2,678.68

Note that:

More examples of the Excel NPV function can be found on the Microsoft Office website