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Calculating Investments

Most financial functions accept similar arguments. To streamline this section, we'll define the common arguments in Table 16-1 and explain any differences in how you can use them in the individual function descriptions. Another list of common arguments accompanies the section on depreciation.

Table 16-1. Investment Function Arguments
ArgumentDescription
Future valueThe value of an investment at the end of the term (0 if omitted)
Inflow 1, inflow 2, inflow nPeriodic payments when individual amounts differ
Number of periodsTerm of investment
PaymentPeriodic payments when individual amounts are the same
TypeWhen payment is to be made (0 if omitted); 0 = at end of period; 1 = at beginning of period
PeriodNumber of an individual periodic payment
Present valueValue of investment today
RateDiscount rate or interest rate
GuessA starting interest rate for iterative calculations (10 percent if omitted)
Finance rateThe rate at which you borrow money to purchase an investment
Reinvestment rateThe rate at which you reinvest cash received from an investment



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