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Chapter 17. Building Loan Formulas > Calculating How Much You Can Borrow

Calculating How Much You Can Borrow

If you know the current interest rate that your bank is offering for loans, when you want to have the loan paid off, and how much you can afford each month for the payments, you might then wonder what is the maximum amount you can borrow under those terms. To figure this out, you need to solve for the principal—that is, present value. You do that in Excel by using the PV() function:

PV(rate, nper, pmt, [fv], [type])


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