The present value is the amount of money that was initially borrowed. If we know the payment amount, the interest rate per period, and the amount of periods, the PV function will give us the Present Value of a loan.
So we’ll write Equals, PV, and then select the rate, number of periods, payment amount, and future value. We are given the amount that was originally borrowed.
Now we can change the payment to show how big of a loan we were given if we are paying a different amount per period.
In this lesson we have quickly shown how to use the PV function to get the present value of a loan.