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Calculate the present value of an investment

Calculate the present value of an investment - Google Sheets Tutorial

From the course: Google Sheets: Advanced Formulas and Functions

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Calculate the present value of an investment

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- [Instructor] Calculating the present value of an investment enables you to answer this question. How much is a proposed investment worth in today's dollars? You can answer that question using the PV, or present value, function. When you calculate present value, you need to know several different pieces of information. The first is the discount rate. If you're not familiar with the discount rate, it is the amount that you expect to earn risk free or nearly risk free from other investments. For example, you might have a product that you sell that has given you 6% profit for the last 10 years and you don't see any reason that will change. You might also have some very low-risk investments through government bonds and so on, but remember that there is a very strong distinction between very low risk and no risk. For example, a US treasury bill or a treasury bond is considered to be very low risk because the United States has never defaulted on its debt obligations. On the other hand…

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