# Annuity Functions in Excel

Microsoft Excel provides various functions to perform constant annuity calculations. These functions can be used for both loans and investments.

Constant annuities are streams of equal cash flows occurring at equal intervals.

All annuities are governed by a set of variables. Excel provides functions for all these variables.

These variables are:

Rate: The interest rate per period

Nper: Total number of periods in the annuity

PMT: The payment per period

PV: The present value of cash flows. The total amount that a series of future cash flows is worth now.

FV: The future value of cash flows based on periodic, equal cash flows.

An additional input is the “Type”, which is 0 for a regular annuity or annuity in arrears where the first payment occurs one period from now and 1 for an annuity due or annuity in advance where the first payment occurs now.

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