Documentation/How Tos/Calc: XNPV function

XNPV

Returns the net present value of an investment with irregular cash payments.

Syntax:

XNPV(rate; payments; dates)

rate is the annual interest rate.

payments is a range or array containing payments made, positive if paid to you, negative if you pay.

dates is a range or array containing the dates on which those payments are made.

XNPV calculates a net present value on the first date given (date₀), using the formula:

where pay_i is the i^th payment and date_i the i^th date, i starting at 0.

The calculation assumes a 365 day year, even in a leap year.

Example:

XNPV(5%; B2:B4; C2:C4)

where B2:B4 contains -1000, 500, 550 and C2:C4 contains the dates 2008-01-01, 2009-01-01, 2009-07-01, returns approximately -12.65. If you bought an investment for 1000 on 2008-01-01 which paid 500 on 2009-01-01 and 550 on 2009-07-01 you'd make a small loss, compared to investing at a 5% interest rate.

XNPV(5%; B2:B4; C2:C4)

where B2:B4 contains 0, 500, 550 and C2:C4 contains the dates 2008-01-01, 2009-01-01, 2009-07-01, returns approximately 987.35, the net present value on 2008-01-01 of an investment which paid 500 on 2009-01-01 and 550 on 2009-07-01, using a 5% interest rate.

Issues:

• The calculation is based on a 365 day year, even in a leap year, using actual days difference. There are other ways to calculate net present value.