Question:
Which financial function calculates the lump-sum amount for series of future payments?
Which financial function calculates the lump-sum amount for series of future payments?
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PV gives the present value, which is the lump sum today equal to a series of future payments.
Updated On: Oct 26, 2026
- NPER
- FV
- PV
- PMT
Show Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Step 1: Understanding the Concept:
Excel has financial functions for loans and investments.
We need the one that converts a series of future payments into a single amount today.
Step 2: Working Out the Answer:
PV stands for present value.
It returns the total amount that a series of future payments is worth now. That is a lump sum.
So the answer is PV, option (C).
Step 3: Why the Other Options Are Wrong:
Option (A): NPER returns the number of payment periods for an investment.
Option (B): FV returns the future value, the amount an investment will grow to later.
Option (D): PMT returns the amount of each regular payment on a loan.
Final Answer:
PV calculates the lump sum for future payments. This is option (C).
Excel has financial functions for loans and investments.
We need the one that converts a series of future payments into a single amount today.
Step 2: Working Out the Answer:
PV stands for present value.
It returns the total amount that a series of future payments is worth now. That is a lump sum.
So the answer is PV, option (C).
Step 3: Why the Other Options Are Wrong:
Option (A): NPER returns the number of payment periods for an investment.
Option (B): FV returns the future value, the amount an investment will grow to later.
Option (D): PMT returns the amount of each regular payment on a loan.
Final Answer:
PV calculates the lump sum for future payments. This is option (C).
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