1. Present value functions: Time Value of Money calculations using Excel Time value of moner cancepts are a lifeline to most areas of the finance discipline. Aithough the cakulabions can be solved waing mathematicel equatians or a finandal caiculator, ther can also be solved using a spreadsheec. Spreadtheets ardd calculators provide tools and functions that can make the process of deriwing results more efriclent and accurate. Mastering time value of money caiculations through Excel will save you tithe in your course and help you work through nestred calculations emsientiry Let's first review the terms in fxcel that are comparable to the kevs found on a financial calculator: There is another term that you will often encounter when performing time value of cakulations: fype The fype term used in Excel time value function is used to represent the If the payment is made at the beginning of the year, the value of type will be ; if the payment is made at the end of the yeac, the value of type will be Present value calculations The present value or "PV function" in Excel is used to calculate the current value of future payments, Consider this example: Suppose your uncle sends you a $10,000 certificate of depost in your name which wal earn 4% interest for the investment period. Under the terms of his gift, you can withdraw the funds after 4 years on the day of your gradiation. Use Excel functions to caiculate the value of the amount your uncle deposited today to have $10,000 after you graduate. (Note: The certificate of deposit calculates and pays any eamed interest at the beginning of each vear.) Note: You must enter the future value as a negative number in order for the PV function to return a positive number. Hint: The last two arguments to the PV function are optional, ss denoted by the square brackets in the function defintien. You do net need to enter these brackets into excel when plugging in values or cell references into the function