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11/1/2019 Top 15 Financial Functions in Excel | WallStreetMojo
Top 15 Financial Functions in Excel

(https://www.wallstreet
mojo.com/)
Financial Modeling  (https://www.wallstreetmojo.com/sensitivity-analysis-in-

excel/)
Tutorials
 (https://www.wallstreetmojo.com/ nancial-modeling-
 Excel Modeling 
templates/)
Financial Functions

in Excel 
Sensitivity Analysis in
Excel
 (https://www.wallstre
etmojo.com/sensitivity
-analysis-in-excel/)
Sensitivity Analysis
(https://www.wallstre
 etmojo.com/sensitivity
-analysis/)
Capital Budgeting
Techniques
Top 15 Financial Functions in Excel – Microsoft Excel is the most
 etmojo.com/capital-
budgeting- important tool of Investment Bankers
techniques/)
(https://www.wallstreetmojo.com/what-is-investment-banking/)and
Time Value of Money
Financial Analysts. They spent more than 70% of the time on
preparing Excel Models (https://www.wallstreetmojo.com/free-
 etmojo.com/time- nancial-modeling-training-course/), formulating Assumptions,

value-money/)
Valuations (https://www.wallstreetmojo.com/category/valuation/),
Future Value Formula
(https://www.wallstre Calculations, Graphs etc. It is safe to assume that Investment bankers

https://www.wallstreetmojo.com/financial-functions-in-excel/ 1/38
 etmojo.com/future-
are masters in excel shortcuts and formulas. Though there are more
value-fv-formula/)
(https://www.wallstreet than 50+ Financial Functions in Excel, here is the list of Top 15
Present Value Factor
mojo.com/) nancial functions in excel that are most frequently used in practical
 etmojo.com/present-
situations.
value-factor-pv/)
Perpetuity Formula Without much ado, let’s have a look at all the nancial functions one
 etmojo.com/perpetuity by one –
-formula/)
Present Value vs #1 – Future Value (FV)
Future Value #2 – FVSCHEDULE
#3 – Present Value (PV)
 etmojo.com/present-
value-vs-future- #4 – Net Present Value (NPV)
value/)
#5 – XNPV
Annuity vs Pension
#6 – PMT
 etmojo.com/annuity- #7 – PPMT
vs-pension/) #8 – Internal Rate of Return (IRR)
Present Value of an
#9 – Modi ed Internal Rate of Return (MIRR)
Annuity
#10 – XIRR
etmojo.com/present- #11 – NPER
value-of-an-annuity/)
#12 – RATE
Doubling Time
Formula #13 – EFFECT
(https://www.wallstre #14 – NOMINAL

etmojo.com/doubling-
#15 – SLN
time-formula/)
Annuity Formula
(https://www.wallstre Recommended Courses
 etmojo.com/annuity-
Financial Analyst Modeling Training
formula/)
Present Value of an (https://www.wallstreetmojo.com/full-access-bundle/)
Annuity Formula Financial Modeling Online Course
 etmojo.com/present- (https://www.wallstreetmojo.com/ nancial-modeling-
value-of-an-annuity- course/)
mojo.com/)
formula/)
Certi cation Course in Investment Banking
Future Value of
(https://www.wallstreetmojo.com/investment-banking-
Annuity Due Formula
(https://www.wallstre training-course/)
 etmojo.com/future-
value-of-annuity-due-
formula/)
Maturity Value
 etmojo.com/maturity- #1 – Future Value (FV) : Financial
value/) Function in Excel
Annuity vs Perpetuity
 etmojo.com/annuity- If you want to nd out the future value of a particular investment
vs-perpetuity/) which has a constant interest rate and periodic payment, use the
Annuity vs Lump Sum following formula –
 etmojo.com/annuity-
vs-lump-sum/)
Deferred Annuity
Formula
etmojo.com/deferred-
FV (Rate, Nper, [Pmt], PV, [Type])
annuity-formula/)
Internal Rate of
Rate = It is the interest rate/period
Return (IRR)
(https://www.wallstre Nper = Number of periods

etmojo.com/internal-
[Pmt] = Payment/period
rate-of-return-irr/)
PV = Present Value
IRR Examples [Type] = When the payment is made (if nothing is mentioned, it’s
(Internal Rate of
assumed that the payment has been made at the end of the
Return)
 (https://www.wallstre period)
t j /i
etmojo.com/irr-
examples/)
NPV vs XNPV FV Example
mojo.com/)
 etmojo.com/npv-vs- A has invested US $100 in 2016. The payment has been made yearly.
xnpv/) The interest rate is 10% p.a. What would be the FV in 2019?
NPV vs IRR
(https://www.wallstre Solution: In excel, we will put the equation as follows –
 etmojo.com/npv-vs-
irr/)
NPV Formula
etmojo.com/net-

present-value-npv-
formula/)
NPV Pro le
 etmojo.com/npv-
pro le/)
NPV Examples
 etmojo.com/npv- = FV (10%, 3, 1, – 100)
examples/)
Advantages and = US $129.79

Disadvantages of
NPV

 etmojo.com/advantag
es-and-
disadvantages-of- #2 – FVSCHEDULE : Financial
Function in Excel
npv/)
Mutually Exclusive
Projects
 (https://www.wallstre This nancial function is important when you need to calculate the
etmojo.com/mutually-
future value with the variable interest rate. Have a look at the function
exclusive-projects/)
PV vs NPV below –
 etmojo.com/pv-vs-
npv/) Start Your Free Investment Banking Course
mojo.com/)
IRR vs ROI Download IB Excel Templates, Accounting, Valuation, Financial Modeling,
(https://www.wallstre Video Tutorials
 etmojo.com/irr-vs-
roi/)
Break Even Point

 etmojo.com/break-
even-point/)
Break Even Analysis

(https://www.wallstre FVSCHEDULE = (Principal, Schedule)
even-analysis/)
Principal = Principal is the present value of a particular
Breakeven Analysis
investment
Examples
Schedule = A series of interest rate put together (in case of
etmojo.com/breakeve excel, we will use different boxes and select the range)
n-analysis-examples/)
Break Even Chart

FVSCHEDULE Example:
even-chart/) M has invested US $100 at the end of 2016. It is expected that the
Bene t Cost Ratio interest rate will change every year. In 2017, 2018 & 2019, the
 etmojo.com/bene t- interest rates would be 4%, 6% & 5% respectively. What would be
cost-ratio/) the FV in 2019?

Payback Period &
Discounted Payback Solution: In excel, we will do the following –
Period
 etmojo.com/payback-
period-discounted-
payback-period/)
Payback period
Formula

etmojo.com/payback-
period-formula/)
mojo.com/)
Discounted Payback
Period Formula
(https://www.wallstre = FVSCHEDULE (C1, C2:C4)
 etmojo.com/discounte
d-payback-period-
formula/)
Payback Period
Advantages and
Disadvantages

etmojo.com/payback-
period-advantages-
and-disadvantages/)
Pro tability Index

 etmojo.com/pro tabili
ty-index/)
= US $115.752
Feasibility Study
Examples
etmojo.com/feasibility #3 – Present Value
-study-examples/)
Cash Burn Rate

(PV) : Financial Function in Excel
 etmojo.com/cash- If you know how to calculate FV, it’s easier for you to nd out PV.
burn-rate/) Here’s how –
Interest Formula
 etmojo.com/interest-
formula/)
Simple Interest
 etmojo.com/simple-
interest/)
Simple Interest vs
Compound Interest
(https://www.wallstre PV = (Rate, Nper, [Pmt], FV, [Type])
mojo.com/)
 etmojo.com/simple-
interest-vs-
compound-interest/)
Nper = Number of periods
Simple Interest
Formula [Pmt] = Payment/period
 (https://www.wallstre FV = Future Value
etmojo.com/simple-
interest-formula/) [Type] = When the payment is made (if nothing is mentioned, it’s
CAGR Formula assumed that the payment has been made at the end of the
(Compounded Annual
period)
Growth Rate)
etmojo.com/cagr-
formula/)
PV Example:
Growth Rate Formula The future value of an investment is US $100 in 2019. The payment
 etmojo.com/growth- has been made yearly. The interest rate is 10% p.a. What would be
rate-formula/) the PV as of now?

Effective Interest Rate
(https://www.wallstre Solution: In excel, we will put the equation as follows –
 etmojo.com/effective-
interest-rate/)
Loan Amortization
Schedule
 etmojo.com/loan-
amortization-
schedule/)
Mortgage Formula
 etmojo.com/mortgage
-formula/)
Loan Principal
Amount
etmojo.com/loan-
principal/)
mojo.com/)
Interest Rate Formula
 etmojo.com/interest-
rate-formula/)
Rate of Return
= PV (10%, 3, 1, – 100)
Formula
etmojo.com/rate-of- = US $72.64
return-formula/)
Effective Annual Rate
 etmojo.com/effective-
#4 – Net Present Value (NPV) :
annual-rate/) Financial Function in Excel
Effective Annual Rate
Formula (EAR)
Net Present Value is the sum total of positive and negative cash ows

etmojo.com/effective- over the years (https://www.wallstreetmojo.com/negative-cash- ow/).
annual-rate-formula/) Here’s how we will represent it in excel –
Compounding
 etmojo.com/compoun
ding/)
Compounding
Formula
etmojo.com/compoun NPV = (Rate, Value 1, [Value 2], [Value 3]…)
ding-formula/)
Compound Interest Rate = Discount rate for a period
Value 1, [Value 2], [Value 3]… = Positive or negative cash ows
 etmojo.com/compoun Here, negative values would be considered as payments and

d-interest/)
positive values would be treated as in ows.
Compound Interest
Examples
 (https://www.wallstre NPV Example

etmojo.com/compoun
d-interest-examples/)
mojo.com/) Here is a series of data from which we need to nd NPV –
Daily Compound
Interest
 (https://www.wallstre  Popular Course in this category

etmojo.com/daily-
compound-interest/)
Monthly Compound
Interest Formula

 etmojo.com/monthly- All in One Financial Analyst Bundle (250+ Courses,
compound-interest- 40+ Projects)
formula/) 250+ Courses | 40+ Projects | 1000+ Hours | Full Lifetime Access |
Discount Rate vs Certi cate of Completion
Interest Rate      4.9 (1,067 ratings)
(https://www.wallstre Course Price

etmojo.com/discount-
rate-vs-interest-rate/) $199 $1999
Discounting Formula View Course
 etmojo.com/discounti (https://www.wallstreetmojo.com/full-access-bundle/?
ng-formula/)
btnz=wsm-blg-inline-banner1)
Rule of 72 Related Courses

 etmojo.com/rule-of- M&A Modeling Course
(https://www.wallstreetmojo.com/mergers-and-acquisitions-
72-formula/)
course/?btnz=wsm-blg-inline-banner1)
Geometric Mean
LBO Modeling Course (https://www.wallstreetmojo.com/lbo-
Return
modeling-course/?btnz=wsm-blg-inline-banner1)
 etmojo.com/geometric Valuation Modeling Course
-mean-return- (https://www.wallstreetmojo.com/valuation-course/?
formula/) btnz=wsm-blg-inline-banner1)
Geometric Mean vs
Arithmetic Mean
(https://www.wallstre Details In US $
 etmojo.com/geometric
ith ti Rate of Discount 5%
-mean-vs-arithmetic- Rate of Discount 5%

mean/)
(https://www.wallstreet Initial Investment -1000
Real Rate of Return
mojo.com/)
Formula
Return from 1st year 300

etmojo.com/real-rate-
Return from 2nd year 400
of-return-formula/)
Continuous
Return from 3rd year 400
compounding
Formula Return from 4th year 300

etmojo.com/continuou
s-compounding-
formula/) Find out the NPV.
Weighted average
Formula Solution: In Excel, we will do the following –
etmojo.com/weighted
-average-formula/)
Average Formula
 etmojo.com/average-
formula/)
EWMA (Exponentially
Weighted Moving
 Average)
etmojo.com/ewma/)
Average Rate of
Return Formula =NPV (5%, B4:B7) + B3
 etmojo.com/average-
= US $240.87
rate-of-return-
formula/)
Mean Formula Also, have a look at this article – NPV vs IRR
 etmojo.com/mean- (https://www.wallstreetmojo.com/npv-vs-irr/)
formula/)
Mean Examples
#5 – XNPV : Financial Function in
 etmojo.com/mean-
mojo.com/)
examples/)
Excel
Population Mean
Formula This nancial function is similar as the NPV with a twist. Here the
 (https://www.wallstre payment and income are not periodic. Rather speci c dates are
etmojo.com/populatio
n-mean-formula/) mentioned for each payment and income. Here’s how we will calculate
Weighted Mean it –
Formula
etmojo.com/weighted
-mean-formula/)
Harmonic Mean
Formula
 (https://www.wallstre XNPV = (Rate, Values, Dates)

etmojo.com/harmonic
-mean-formula/)
Rate = Discount rate for a period
Median Formula in
Statistics Values = Positive or negative cash ows (an array of values)
 (https://www.wallstre Dates = Speci c dates (an array of dates)

etmojo.com/median-
formula/)
Range Formula
XNPV Example
 etmojo.com/range- Here is a series of data from which we need to nd NPV –
formula/)
Outlier Formula
 etmojo.com/outlier-
formula/)
Decile Formula
Details In US $ Dates
 etmojo.com/decile-
Rate of Discount 5%
formula/)
Midrange Formula Initial Investment -1000 1st December, 2011

 etmojo.com/midrange
Return from 1st year 300 1st January, 2012
mojo.com/)
-formula/)
Quartile Deviation Return from 2nd year 400 1st February, 2013
 etmojo.com/quartile- Return from 3rd year 400 1st March, 2014
deviation/)
Return from 4th year 300 1st April, 2015
Expected Value
Formula
etmojo.com/expected- Solution: In excel, we will do as following –
value-formula/)
Exponential Growth
Formula
etmojo.com/exponenti
al-growth-formula/)
Margin of Error
Formula
etmojo.com/margin-
of-error-formula/)
Decrease Percentage
Formula
 (https://www.wallstre =XNPV (5%, B2:B6, C2:C6)

etmojo.com/decrease-
percentage-formula/)
= US$289.90
Relative Change
 etmojo.com/relative-
change/)
Percent Error Formula

 etmojo.com/percent- #6 – PMT : Financial Function in
error-formula/) Excel
Holding Period Return

Formula
(https://www.wallstreet In excel, PMT denotes the periodical payment required to pay off for a
mojo.com/)
 etmojo.com/holding- particular period of time with a constant interest rate. Let’s have a look
period-return- at how to calculate it in excel –
formula-hpr/)
Cost Bene t Analysis
 etmojo.com/cost-
bene t-analysis/)
Cost Bene t Analysis

Examples
PMT = (Rate, Nper, PV, [FV], [Type])
 etmojo.com/cost-
bene t-analysis-
examples/)
Cost Volume Pro t Nper = Number of periods

Analysis PV = Present Value
 etmojo.com/cost- [FV] = An optional argument which is about the future value of a
volume-pro t- loan (if nothing is mentioned, FV is considered as “0”)
analysis/)
[Type] = When the payment is made (if nothing is mentioned, it’s
Opportunity Cost
Formula
 (https://www.wallstre period)
etmojo.com/opportuni
ty-cost-formula/)
Opportunity Cost PMT Example

Examples
US $1000 need to be paid in full in 3 years. Interest rate is 10% p.a.
etmojo.com/opportuni and the payment needs to be done yearly. Find out the PMT.
ty-cost-examples/)
Solution: In excel, we will compute it in the following manner –
APR vs APY
 etmojo.com/apr-vs-
apy/)
Mortgage APR vs
Interest Rate
mojo.com/)
etmojo.com/mortgage
-apr-vs-interest-rate/)
Normal Distribution
= PMT (10%, 3, 1000)
Formula
etmojo.com/normal- = – 402.11
distribution-formula/)
Standard Normal
Distribution Formula #7 – PPMT : Financial Function in
 etmojo.com/standard- Excel
normal-distribution-
formula/)
It is another version of PMT. The only difference is this – PPMT
Normalization
Formula
calculates payment on principal with a constant interest rate and
 (https://www.wallstre constant periodic payments. Here’s how to calculate PPMT –

etmojo.com/normaliza
tion-formula/)
Bell Curve
 etmojo.com/bell-
curve/)
T Distribution
PPMT = (Rate, Per, Nper, PV, [FV], [Type])
Formula
etmojo.com/t- Rate = It is the interest rate/period
distribution-formula/) Per = The period for which the principal is to be calculated
Regression Formula
PV = Present Value
 etmojo.com/regressio [FV] = An optional argument which is about the future value of a

n-formula/)
loan (if nothing is mentioned, FV is considered as “0”)
Regression Analysis
Formula [Type] = When the payment is made (if nothing is mentioned, it’s
(https://www.wallstre assumed that the payment has been made at the end of the

etmojo.com/regressio
(https://www.wallstreet period)
n-analysis-formula/)
mojo.com/)
Multiple Regression
Formula
PPMT Example
etmojo.com/multiple-
US $1000 need to be paid in full in 3 years. Interest rate is 10% p.a.
regression-formula/)
and the payment needs to be done yearly. Find out the PPMT in rst
Correlation
Coef cient Formula year and second year.
 etmojo.com/correlatio Solution: In excel, we will compute it in the following manner –
n-coef cient-
formula/)
1st year,
Correlation Formula
 etmojo.com/correlatio
n-formula/)
Correlation Examples
 etmojo.com/correlatio
n-examples/)
Coef cient of
Determination
etmojo.com/coef cien =PPMT (10%, 1, 3, 1000)
t-of-determination/)
Population Variance = US $-302.11

Formula
 (https://www.wallstre 2nd year,

etmojo.com/populatio
n-variance-formula/)
Covariance Formula
 etmojo.com/covarianc
e-formula/)
Coef cient of
Variation Formula
mojo.com/) cien
 etmojo.com/coef
t-of-variation-
formula/)
Sample Standard
Deviation Formula
=PPMT (10%, 2, 3, 1000)
 etmojo.com/sample- = US $-332.33
standard-deviation-
formula/)
Relative Standard
Deviation Formula
#8 – Internal Rate of Return (IRR)
(https://www.wallstre : Financial Function in Excel
 etmojo.com/relative-
standard-deviation-
formula/) To understand whether any new project or investment is pro table or
Standard Deviation not, rm uses IRR. If IRR is more than the hurdle rate (acceptable rate/
Formula average cost of capital (https://www.wallstreetmojo.com/weighted-
 average-cost-capital-wacc/)), then it’s pro table for the rm and vice-
etmojo.com/standard-
deviation-formula/) versa. Let’s have a look, how we nd out IRR in excel
Standard Deviation (https://www.wallstreetmojo.com/calculate-irr-in-excel/) –
Examples
etmojo.com/standard-
deviation-examples/)
Effect Size
 etmojo.com/effect-
size/) IRR = (Values, [Guess])
Sample Size Formula Values = Positive or negative cash ows (an array of values)
 etmojo.com/sample- [Guess] = An assumption of what you think IRR should be
size-formula/)
Volatility Formula
IRR Example
 etmojo.com/volatility-
Here is a series of data from which we need to nd IRR –
mojo.com/)
formula/)
Binomial Distribution
Formula Details In US $
etmojo.com/binomial- Initial Investment -1000
distribution-formula/)
Multicollinearity
(https://www.wallstre nd
 etmojo.com/multicollin Return from 2 year 400
earity/)
Return from 3rd year 400
Hypergeometric
Distribution Return from 4th year 300

etmojo.com/hypergeo
metric-distribution/)
Find out IRR.
Exponential
Distribution
Solution: Here’s how we will compute IRR in excel –
etmojo.com/exponenti
al-distribution/)
Central Limit Theorem

 etmojo.com/central-
limit-theorem/)
Poisson Distribution
 etmojo.com/poisson-
distribution/)
Central Tendency
(https://www.wallstre = IRR (A2:A6, 0.1)
 etmojo.com/central- = 15%
tendency/)
Hypothesis Testing

#9 – Modi ed Internal Rate of
 etmojo.com/hypothesi #9 Modi ed Internal Rate of

s-testing/)
(https://www.wallstreet Return (MIRR) : Financial
Function in Excel
Gini Coef cient
mojo.com/)
 etmojo.com/gini-
coef cient/)
Modi ed Internal Rate of Return
Quartile Formula
(https://www.wallstreetmojo.com/internal-rate-of-return-irr/) is one
 etmojo.com/quartile- step ahead of Internal Rate of Return. MIRR signi es that the
formula/)
investment is pro table and is used in business. MIRR is calculated by
P Value Formula
assuming NPV as zero. Here’s how to calculate MIRR in excel –
 etmojo.com/p-value-
formula/)
Skewness Formula
 etmojo.com/skewness
-formula/)
R Squared Formula MIRR = (Values, Finance rate, Reinvestment rate)
 etmojo.com/r-
Values = Positive or negative cash ows (an array of values)
squared-formula/)
Adjusted R Squared Finance rate = Interest rate paid for the money used in cash
(https://www.wallstre ows
 etmojo.com/adjusted-
Reinvestment rate = Interest rate paid for reinvestment of cash
r-squared/)
Regression vs ows
ANOVA
etmojo.com/regressio MIRR Example
n-vs-anova/)
Here is a series of data from which we need to nd MIRR –
Z Test Formula
 etmojo.com/z-test- Details In US $
formula/)
Z Score Formula Initial Investment -1000

 etmojo.com/z-score-
formula/)
Z Test vs T Test Return from 2nd year 400
mojo.com/)
 etmojo.com/z-test-vs- Return from 3rd year 400
t-test/)
F-Test Formula
Return from 4th year 300
 etmojo.com/f-test-
formula/) Finance rate = 12%; Reinvestment rate = 10%. Find out IRR.
Quantitative Research
etmojo.com/quantitati

ve-research-
examples/)
Histogram Examples
 etmojo.com/histogram
-examples/)
 Financial Modeling
Basics (9+) 
mojo.com/category/ nan Solution: Let’s look at the calculation of MIRR –
cial-modeling/ nancial-
modeling-basics) = MIRR (B2:B6, 12%, 10%)
Related Courses = 13%

Financial Modeling
Course
etmojo.com/ nancial-
modeling-course/?

btnz=wsm-blg-rel-
crs)
M&A Modeling Course
etmojo.com/mergers-
 and-acquisitions-
mojo.com/)
course/?btnz=wsm-
blg-rel-crs)
LBO Modeling Course

etmojo.com/lbo-
 modeling-course/?
btnz=wsm-blg-rel-
crs) #10 – XIRR : Financial Function
Valuation Modeling
Course
in Excel
 etmojo.com/valuation- Here we need to nd out IRR which has speci c dates of cash ow.
course/?btnz=wsm-
That’s the only difference between IRR and XIRR. Have a look at how
blg-rel-crs)
to calculate XIRR in excel nancial function –
XIRR = (Values, Dates, [Guess])
Values = Positive or negative cash ows (an array of values)

Dates = Speci c dates (an array of dates)
[Guess] = An assumption of what you think IRR should be
XIRR Example
Here is a series of data from which we need to nd XIRR –
Details In US $ Dates
Initial Investment -1000 1st December, 2011

mojo.com/) Return from 1st year 300 1st January, 2012
Return from 2nd year 400 1st February, 2013
Return from 3rd year 400 1st March, 2014
Return from 4th year 300 1st April, 2015
Solution: Let’s have a look at the solution –
= XIRR (B2:B6, C2:C6, 0.1)
= 24%
#11 – NPER : Financial Function

in Excel
It is simply the number of periods one requires to pay off the loan.
Let’s see how we can calculate NPER in excel
(https://www.wallstreetmojo.com/nper-in-excel/) –
mojo.com/)
NPER = (Rate, PMT, PV, [FV], [Type])

PMT = Amount paid per period
PV = Present Value
[FV] = An optional argument which is about the future value of a

period)
NPER Example
US $200 is paid per year for a loan of US $1000. Interest rate is 10%
p.a. and the payment needs to be done yearly. Find out the NPER.
Solution: We need to calculate NPER in the following manner –
mojo.com/)
= NPER (10%, -200, 1000)
= 7.27 years
#12 – RATE : Financial Function

in Excel
Through RATE function (https://www.wallstreetmojo.com/rate-
function-in-excel/), we can calculate the interest rate needed to pay to
pay off the loan in full for a given period of time. Let’s have a look at
how to calculate RATE nancial function in excel –
RATE = (NPER, PMT, PV, [FV], [Type], [Guess])
PMT = Amount paid per period

PV = Present Value
[FV] = An optional argument which is about the future value of a

(https://www.wallstreet period)
mojo.com/) [Guess] = An assumption of what you think RATE should be
RATE Example
US $200 is paid per year for a loan of US $1000 for 6 years and the
payment needs to be done yearly. Find out the RATE.
Solution:
= RATE (6, -200, 1000, 0.1)
mojo.com/)
= 5%
#13 – EFFECT : Financial

Function in Excel
Through EFFECT function, we can understand the effective annual
interest rate. When we have the nominal interest rate

(https://www.wallstreetmojo.com/nominal-interest-rate-formula/) and
the number of compounding per year, it becomes easy to nd out the
effective rate. Let’s have a look at how to calculate EFFECT nancial
function in excel –
mojo.com/)
EFFECT = (Nominal_Rate, NPERY)
Nominal_Rate = Nominal Interest Rate
NPERY = Number of compounding per year
EFFECT Example
A payment needs to be paid with a nominal interest rate of 12% when
the number of compounding per year is 12.
Solution:
mojo.com/)
= EFFECT (12%, 12)
= 12.68%
#14 – NOMINAL : Financial

Function in Excel
When we have the effective annual rate and the number of
compounding periods per year, we can calculate NOMINAL rate for
the year. Let’s have a look at how to do it in excel –
mojo.com/)
NOMINAL = (Effect_Rate, NPERY)
Effect_Rate = Effective annual interest rate

NPERY = Number of compounding per year
NOMINAL Example
A payment needs to be paid with an effective interest rate or annual
equivalent rate (https://www.wallstreetmojo.com/effective-interest-
rate/) of 12% when the number of compounding per year is 12.
Solution:
mojo.com/)
= NOMINAL (12%, 12)
= 11.39%
#15 – SLN : Financial Function in

Excel
Through SLN function, we can calculate depreciation via straight line
method. In excel, we will look at SLN nancial function as follows –
mojo.com/)
SLN = (Cost, Salvage, Life)
Cost = Cost of asset when bought (initial amount)
Salvage = Value of asset after depreciation

Life = Number of periods over which the asset is being
depreciated
SLN Example
The initial cost of machinery is US $5000. It has been depreciated in
Straight Line Method. The machinery was used for 10 years and now
the salvage value of machinery
(https://www.wallstreetmojo.com/salvage-value-scrap/) is US $300.
Find depreciation charged per year.
Solution:
mojo.com/)
= SLN (5000, 300, 10)
= US $470 per year
You may also look at Depreciation Complete Guide

(https://www.wallstreetmojo.com/depreciation/)
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About Dheeraj Vaidya

(https://www.linkedin.com/in/dheerajvaidya/)
(https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw)
(https://www.facebook.com/wallstreetmojo/) (https://twitter.com/dheerajvaidya)
(https://plus.google.com/112077392432985651502)worked as JPMorgan Equity Analyst, ex-
CLSA India Analyst ; edu quali cation - engg (IIT Delhi), MBA (IIML); This is my personal blog
that aims to help students and professionals become awesome in Financial Analysis. Here, I
share secrets about the best ways to analyze Stocks, buzzing IPOs, M&As, Private Equity,
Startups, Valuations and Entrepreneurship.
Comments
Raj says
Thanks Dheeraj.
It’s a great read and very helpful.
Reply
Dheeraj Vaidya says
Thanks Raj!
a s aj
Reply
mojo.com/)
Monika says
Thanks Mr Dheeraj
Reply
Dheeraj Vaidya says
thanks Monika!
Reply
Patrick Vangoidsenhoven says
Thanks Dheeraj, a good mix of details and keeping the oversight.
Reply
Dheeraj Vaidya says
thanks Patrick!
Reply
Priyank says
mojo.com/)
Hi dear you are doing good job making people nancially literate. Would you please explain how
to handle qtrly/monthly payouts while calculating FV/PV
Reply
Dheeraj Vaidya says
Hi Priyank,
If you make monthly payments on a three-year loan at 12 percent annual interest, use
12%/12 for rate and 3*12 for nper. If you make annual payments on the same loan, use
12% for rate and 3 for nper.
Hope this clari es the same.
Reply
Mveleli says
Dear Dheeraj Vaidya
Thanks a great deal for all you assistance herein and appreciate all the knowledge tank we are
getting herein.
Reply
Dheeraj Vaidya says
thanks Mveleli, Glad you liked this site.
mojo.com/)
Reply
Rubel Fernando says
This blog is really awesome, the list of nancial functions in excels which you have mentioned
has helped me a lot and were very useful for me in practical situations. Thank you so much for
sharing this blog.
Reply
Dheeraj Vaidya says
thanks Rubel!
Reply
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11/1/2019 Top 15 Financial Functions in Excel | WallStreetMojo

Top 15 Financial Functions in Excel

Financial Modeling  (https://www.wallstreetmojo.com/sensitivity-analysis-in-

 etmojo.com/time- nancial-modeling-training-course/), formulating Assumptions,

Advantages and = US $129.79

Break Even Point

Break Even Analysis

Break Even Chart

cost-ratio/) the FV in 2019?

Pro tability Index

Cash Burn Rate

rate-formula/) the PV as of now?

 etmojo.com/compoun Here, negative values would be considered as payments and

 (https://www.wallstre NPV Example

 (https://www.wallstre  Popular Course in this category

Rule of 72 Related Courses

-mean-vs-arithmetic- Rate of Discount 5%

 (https://www.wallstre XNPV = (Rate, Values, Dates)

 (https://www.wallstre Dates = Speci c dates (an array of dates)

Midrange Formula Initial Investment -1000 1st December, 2011

 (https://www.wallstre =XNPV (5%, B2:B6, C2:C6)

Percent Error Formula

Holding Period Return

Cost Bene t Analysis

Cost Volume Pro t Nper = Number of periods

Opportunity Cost PMT Example

Solution: In excel, we will compute it in the following manner –

 (https://www.wallstre constant periodic payments. Here’s how to calculate PPMT –

 etmojo.com/regressio [FV] = An optional argument which is about the future value of a

Population Variance = US $-302.11

 (https://www.wallstre 2nd year,

Central Limit Theorem

 etmojo.com/hypothesi #9 Modi ed Internal Rate of

modeling-basics) = MIRR (B2:B6, 12%, 10%)

Related Courses = 13%

M&A Modeling Course

LBO Modeling Course

XIRR = (Values, Dates, [Guess])

Values = Positive or negative cash ows (an array of values)

Initial Investment -1000 1st December, 2011

Return from 2nd year 400 1st February, 2013

Return from 3rd year 400 1st March, 2014

Return from 4th year 300 1st April, 2015

Solution: Let’s have a look at the solution –

= XIRR (B2:B6, C2:C6, 0.1)

#11 – NPER : Financial Function

NPER = (Rate, PMT, PV, [FV], [Type])

Rate = It is the interest rate/period

[FV] = An optional argument which is about the future value of a

Solution: We need to calculate NPER in the following manner –

#12 – RATE : Financial Function

RATE = (NPER, PMT, PV, [FV], [Type], [Guess])

Nper = Number of periods

PMT = Amount paid per period

[FV] = An optional argument which is about the future value of a

= RATE (6, -200, 1000, 0.1)

#13 – EFFECT : Financial

interest rate. When we have the nominal interest rate

EFFECT = (Nominal_Rate, NPERY)

Nominal_Rate = Nominal Interest Rate

NPERY = Number of compounding per year

= EFFECT (12%, 12)

#14 – NOMINAL : Financial

NOMINAL = (Effect_Rate, NPERY)