Question on Payment function.

[Don]

When using the payment function in Excel, I notice that the result of
my formula is always a negative number. I have seen two different ways
to crrect this:
One is to put a (-) in the Pv (Present Value) field, before clicking
on the cell that holds the present value.
The other is to put a (-) in front of the equation, like this: = -
PMT(A2/12,A3,A1).
They both give me the desired result. But I was wondering which one is
considered the "proper" way to do it? I am considering taking a MOS
test in Excel (down the road) and I can't find any "official" (ie
Microsoft) documentation that lays this out.

If anyone could give me a reference, or your best idea on how this
would be done, I would appreciate it.
Thanks for taking the time...
Don

 

[Peo Sjoblom]

What kind of MOS are you taking? There are hardly any formulas in the
specialist MOS exam (I took one in 2004)
Btw, why would you convert it to a positive since PMT stands for payments
and from a cash flow it is negative
so if there was such a question the negative value would be correct?


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Regards,

Peo Sjoblom

Excel 95 - Excel 2007
Northwest Excel Solutions
www.nwexcelsolutions.com

 

[Don]

Peo,

I purchased some testing software from Transcender for this purpose.
One of the questions reads, "create a PMT function in cell D15.
Express the present value as a positive number."
That is why I was asking. I understanding what you are saying. But
when the formula normaly computes, it reads as ($1,253.47), which reads
(presents) as a negative number.

Thanks for the quick reply! I look forward to hearing from you again.

Thanks,
Don

 

[Don]

Peo,
A quick edit for my last post. From an accounting standpoint you are
correct. But to put things in context, in this example there were
several formulas being applied to a budget. Housing ,entertainment,
transportation, food, insurance, etc were being totaled. Gross income,
minus these expenditures. From this result you were to subtract the
Yearly loan payments. Then write an If statement if the remainder was
greater than zero, it would say "Yes", less than zero you would say
"No".
Leaving the normal PMT result would give a negative number, and a "No"
result. This would be incorrect in this instance.
Sorry to be so long winded.
Thanks,

 

[Peo Sjoblom]

If they ask to express the present value as a positive number that is what
you do if you get a negative result from PMT, if you use a negative value
for the present value you would get a positive PMT value or do I
misunderstand you?
Regardless, if you want a positive result from the PMT function you can
change the PV to a negative value.


--


Regards,

Peo Sjoblom

Excel 95 - Excel 2007
Northwest Excel Solutions
www.nwexcelsolutions.com