Calculating the present value of an annuity using Microsoft Excel is a fairly straightforward exercise, as long as you know a given annuity's interest rate, payment amount, and duration. But it's important to stipulate that calculating this value is only feasible when dealing with fixed annuities...
• r = nominal annual interest rate • k = number of compounding periods per year • p = number of periods per year corresponding to the basis for n This formula for the effective rate per period is more general than the formula used in the Excel functions EFFECT and NOMINAL. The ...
Interest rate per period (rate) Total number of payment periods (nper) Payment amount for each period (pmt) Having this information at your fingertips will make the calculation process much smoother. Step 2: Use the PV Function In an empty cell, use the Excel formula for calculating the pres...
where N denotes the number of assets in the portfolio and Ri is the rate of return corresponding to the ith asset. We can rewrite Rp in (3.1.1 a) by the vector notation: Here wT represents the transposed vector of weights and R is the vertical vector of rates of return of individual...