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title: "NPV function in Excel: syntax and examples | PracticeExcel"
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> Index of every page on this site: [llms.txt](https://practiceexcelonline.com/llms.txt)

# **The NPV function**

Returns the net present value of future cash flows at a discount rate. The first value is discounted one period, so a payment made today is added outside NPV.

=

NPV(

## **Syntax**

```
NPV(rate, value1, [value2], ...)
```

<dl><dt>**rate **</dt>
<dd>The discount rate per period.</dd>
<dt>**value1 **</dt>
<dd>The cash flows, one per period from period 1, as numbers, cells or a range.</dd>
<dt>**value2 **(optional)</dt>
<dd>More cash flows.</dd></dl>

## **Examples**

F1=NPV(D1,B2:B4)+B1

|  | A | B | C | D | E | F |
| --- | --- | --- | --- | --- | --- | --- |
| 1 | Year 0 | -1000 |  | 0.08 |  | **30.838795** |
| 2 | Year 1 | 400 |  |  |  | |
| 3 | Year 2 | 400 |  |  |  | |
| 4 | Year 3 | 400 |  |  |  | |

B1`=NPV(<sup>1</sup>0.1,<sup>2</sup>110,<sup>3</sup>121)`

|  | A | B |
| --- | --- | --- |
| 1 |  | **200** |

**In plain words:** What <sup>2</sup>110 next year and <sup>3</sup>121 the year after are worth today at <sup>1</sup>a 10% discount rate.

## **Practice NPV**

- [**1****Net present value with NPV**→](https://practiceexcelonline.com/practice/investments/npv-net-present-value)

## **Questions**

<details>

<summary>

### Why is my NPV wrong by a year?

</summary>

NPV discounts the first value one period, as if it were paid a year from now. Leave the investment you pay today out of the range and add it on after, like NPV(rate,B2:B6)+B1.

</details>

<details>

<summary>

### What does a positive NPV mean?

</summary>

The cash flows are worth more than the investment at that discount rate, so the project earns more than the rate you require.

</details>

## **Related functions**

- [**IRR**](https://practiceexcelonline.com/functions/irr)
- [**PMT**](https://practiceexcelonline.com/functions/pmt)

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