This article provides example scenarios and explains various approaches for calculating the time value of money using Microsoft Excel. The Excel tools discussed herein include the FV, FVSCHEDULE, PV, ...

In order to use the model, you have to make several assumptions. First, you must choose a discount rate to apply to future dividend payments in order to reflect their present value accurately.

These values total to $19,250. Now let us assume a discount rate of 15 percent. Using a Microsoft Excel spreadsheet, we could calculate the PV as follows, assuming that the current year is 2007.

In order to use the model, you have to make several assumptions. First, you must choose a discount rate to apply to future dividend payments in order to reflect their present value accurately. You ...