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Define one interval
The fictional schedule is −1,000 now and four receipts of 300 at successive quarter ends. A nominal annual quotation of 12% compounded quarterly gives 3% for each quarter. The schedule has four quarter-length intervals.
Use the quarter rate in the NPV worksheet
After entering CF0 = −1,000, C01 = 300 and F01 = 4, calculate using I = 3. Entering 12 as I discounts every quarterly receipt at 12% per quarter, which describes another model.
- Enter the rate for one quarterNPV3ENTER
The NPV worksheet records I = 3 for its modeled interval.
- Compute the result↓CPT
The mathematical NPV is 115.129521.
Separate the TVM and Cash Flow inputs
| Worksheet | Rate input | Other time inputs |
|---|---|---|
| TVM, quarterly frequency state | I/Y = 12 | P/Y = C/Y = 4 |
| Cash Flow, quarter-length entries | I = 3 | Explicit quarterly entry sequence |
Use an independent schedule calculation
The check is −1,000 + 300/1.03 + 300/1.03² + 300/1.03³ + 300/1.03⁴. A stored TVM frequency is not a substitute for identifying the interval in the Cash Flow sequence. Keep the rate description with the saved schedule.