PMT Argument Not Required with FV, NPER, PV, and RATE Function

ID: Q76358

The information in this article applies to:

Microsoft Excel for Windows, versions 2.x, 3.x, 4.x, 5.0, 5.0c
Microsoft Excel for the Macintosh, versions 2.x, 3.x, 4.x, 5.0, 5.0a
Microsoft Excel for Windows NT, version 5.0
Microsoft Excel for Windows 95, version 7.0

SUMMARY

FV, NPER, PV, and RATE are four of Microsoft Excel's financial functions. The "Microsoft Excel Function Reference" shows that PMT is a required argument for each of these functions. This is a documentation error. The PMT function can be omitted with each of these functions.

MORE INFORMATION

In the headings or syntax lines in the Function Reference Manuals, required arguments are italic and bold and optional arguments are italic but not bold. Because the PMT argument is in bold italics, it is assumed to be required; however, these functions will return valid results with no PMT argument included.

Example

The form of the RATE function is:


   RATE(nper,pmt,pv,fv,type,guess)

In the Function Reference, fv, type, and guess are shown in italics, but not bold, which identifies them as optional.

If you deposit $1000.00 in the bank today and it will be worth $1500.00 in 36 months, and your goal is to determine the monthly interest rate, you can use the RATE function as follows:


   =RATE(36,,-1000,1500)

This returns a monthly interest rate of 1.1%.

REFERENCES

"Microsoft Excel Function Reference," version 4.0, page 347.

"Microsoft Excel Function Reference," version 3.0, page 192.

"Microsoft Excel Functions and Macros," version 2.x, pages 21, 102, 337

Additional query words: 2.0 2.00 2.01 2.1 2.10 2.2 2.20 2.21 3.0 3.00 4.0 4.00

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