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Present Value Formula in Excel 2010 to a specific date
At work we have a specific software that produces analysis for bond deals we work on. I need to replicate one of the reports in excel that relates to present value of cash flow savings. The cash flows are semi-annual (3/1 & 9/1 beginning 9/1/2017) The challenge is I need to be able to PV it back to 6/8/2017. This means the cash flow gets PV'd back to June 8, 2017 on a semi-annual cash flow basis. Also note that the cash flow is related to a municipal bond so it would be on a 30/360 basis instead of act/365.
Below are the cash flows I am trying to PV along with an excel file that shows the results of the PV from the software I am trying to match and my attempt to write a formula that matches the software result. As you can see I can come within $144.86 but need to match perfectly.
PV Date June 8, 2017
Date Cash Flow
9/1/2017 580,230.17
3/1/2018 34,867.25
9/1/2018 (132.75)
3/1/2019 30,892.00
9/1/2019 5,892.00
3/1/2020 26,561.25
9/1/2020 6,561.25
3/1/2021 21,981.25
9/1/2021 11,981.25
3/1/2022 17,045.75
9/1/2022 17,045.75
3/1/2023 11,754.75
9/1/2023 21,754.75
3/1/2024 6,108.25
9/1/2024 31,108.25
U--Deal-Type-Folders-Urban-Renewal_.xlsx
Below are the cash flows I am trying to PV along with an excel file that shows the results of the PV from the software I am trying to match and my attempt to write a formula that matches the software result. As you can see I can come within $144.86 but need to match perfectly.
PV Date June 8, 2017
Date Cash Flow
9/1/2017 580,230.17
3/1/2018 34,867.25
9/1/2018 (132.75)
3/1/2019 30,892.00
9/1/2019 5,892.00
3/1/2020 26,561.25
9/1/2020 6,561.25
3/1/2021 21,981.25
9/1/2021 11,981.25
3/1/2022 17,045.75
9/1/2022 17,045.75
3/1/2023 11,754.75
9/1/2023 21,754.75
3/1/2024 6,108.25
9/1/2024 31,108.25
U--Deal-Type-Folders-Urban-Renewal_.xlsx
Asked:
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2
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2 Solutions
Hi Michael,
Use the Goal Seek Feature in Excel. See the attached pictures. In return This feature find out that to get precise results you should change PV value to be 2.47876051225548%
Br,
Abbas Abdulla
Step1-Goal-Seek.PNG
Goal-Seek-Result.PNG
Use the Goal Seek Feature in Excel. See the attached pictures. In return This feature find out that to get precise results you should change PV value to be 2.47876051225548%
Br,
Abbas Abdulla
Step1-Goal-Seek.PNG
Goal-Seek-Result.PNG
Working backwards on the first result:
Savings: 580,230.17
PV Calc: 576,963.86
Effective rate of 1.005661204% (580230.17 / 576,963.86)
Converting to a percentage is 0.566% which is about 22.97% of PV Rate. On that basis 22.97% of 360 is 82.73 days.
The DAYS360 function gives 83 days. 83/360 gives 0.230556 which as a percentage of the PV rate gives 0.56799%, ie marginally higher than the 0.566% required.
Based on that I agree with Ryan that it is in the roundings.
Savings: 580,230.17
PV Calc: 576,963.86
Effective rate of 1.005661204% (580230.17 / 576,963.86)
Converting to a percentage is 0.566% which is about 22.97% of PV Rate. On that basis 22.97% of 360 is 82.73 days.
The DAYS360 function gives 83 days. 83/360 gives 0.230556 which as a percentage of the PV rate gives 0.56799%, ie marginally higher than the 0.566% required.
Based on that I agree with Ryan that it is in the roundings.
Thanks for your help. I have reached out to see if I can get the formula and you are likely right that it must have to do with rounding somewhere in the formulas. Thanks.
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are you able to get the calculation formula from the specific software you're using?
without the clear formula, we only can trial and error in your Excel