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How to Calculate NPV Using Excel

Learn how to calculate NPV (Net Present Value) using Excel

The NPV Formula

The Formula:

  • R = Return which defines the earnings, how much you have made.
  • t = Time which used to define the duration of what you are calculating.
  • I = Discount Rate which used to define your requirement of return.

    • How to Calculate NPV Using Excel

    Step 1) Create a sheet and set up values:

    In this example, we will calculate the NPV over a 10 years period.

    The Discount Rate, return of requirement is set to 10%.

    Copy the values to follow the example.

    Paste the values directly into your sheet.

    You need to apply the styling on your own, if you want it to be more presentable.

    Time to seconds setup

    Ensure that you have 10% (percentage) as input and not just 10 in cell B9

    Excel Skills for Business Specialization
    Step 2) Start the NPV Function:
  • Select cell E9
  • Type =NPV
  • Select the =NPV function by clicking it
    • Initiate NPV Function
    Step 3) Enter NPV Values:
  • Select B9 to Apply "rate"
  • Type , or ; to separate and move on to value
  • Select range B2:K2
  • Press the enter button

    • Note: The different parts of the function are separated by a symbol, like comma , or semicolon ;

    The symbol depends on your Language Settings.

    Added values to the NPV function
    Nicely done!

    You have successfully calculated the NPV for a 10 years period and applied a 10% Discount Rate.

    In this case, the right answer was 377,87

    function copyFormulas(elementId){ /* Get the text field */ var copyText = document.getElementById(elementId); /* Select the text field */ copyText.select(); copyText.setSelectionRange(0, 99999); /* For mobile devices */ /* Copy the text inside the text field */ navigator.clipboard.writeText(copyText.value) .then(() => { alert('Range copied to clipboard.\nIt can now be pasted into the Excel spreadsheet.') }) .catch((error) => { alert(`Copy failed! ${error}`) }) }

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