Financial Functions & Modeling Flashcards
7 cards from real CES practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Functions & Modeling flashcards as text
What does the PMT function in Excel calculate?
Answer: The periodic payment for a loan or annuity
PMT calculates the fixed periodic payment required to pay off a loan or annuity over a specified number of periods at a constant interest rate.
Which Excel function calculates the Net Present Value of an investment?
Answer: NPV
The NPV function calculates the net present value of an investment based on a discount rate and a series of future cash flows.
In the PMT function =PMT(rate, nper, pv), what does the argument 'nper' represent?
Answer: The total number of payment periods
'nper' stands for number of periods, representing the total number of payment periods in the loan or annuity.
Which Excel function returns the Internal Rate of Return for a series of evenly spaced cash flows?
Answer: IRR
The IRR function returns the internal rate of return for a series of cash flows that occur at regular, equally spaced intervals.
What does the FV function in Excel calculate?
Answer: The future value of an investment based on periodic payments
FV calculates the future value of an investment based on a constant interest rate, regular payments, and an optional initial principal amount.
Which Excel function calculates the present value of a loan or investment?
Answer: PV
The PV function returns the present value of an investment — the total amount that a series of future payments is worth in today's dollars.
What does the NPER function calculate in Excel?
Answer: The number of periods required for an investment or loan
NPER calculates the number of periods required to pay off a loan or reach an investment goal given a constant interest rate and payment amount.