Understanding the Mathematical Relationships Between Excel's Financial Functions
By
ciju
Baker's choice. Dense with flavour, light on filler.
Summary
This article provides a visual and conceptual understanding of how key financial functions in Excel/Google Sheets (FV, PV, RATE, PMT, NPER) are mathematically related. It explains that these functions are essentially different perspectives on the same underlying time value of money equation, showing how each function can be derived from the others. The article aims to help users move beyond memorizing function syntax to truly understanding the relationships between these financial calculation tools.
Key quotes
· 3 pulledYou might have used functions like FV, PV, XIRR in excel/google sheets
In my case, whenever I needed to model some financial calculations, I would struggle with search junk, find out some function, lookup the parameter order, try it out etc.
A visual understanding on how FV, PV, RATE, PMT NPER etc are related functions in Excel/Google Sheets.
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