What is meant by 'Present Value' of an investment ? Explain the financial function which helps in its calculation.

Present value is the total amount that a series of future payments is worth now. The financial function which helps in its calculation is known as PV. Its syntax is PV (rate, nper, pmt, fv, type) Where Rate : Interest rate per period. Nper : Total number of payment periods in an annuity. Pmt : The payment made each period and connot be changed over the life of annuity : Typically pmt includes principal and interest but no other fees and taxes. FV : The future value, or a cash balance to attain after the last payment is made. Type : is the number $\displaystyle 0$ or $\displaystyle 1$ and indicates when payments are due. The fv and type arguments are optional. *