The Excel NOMINAL function is used to calculate the nominal annual rate (i) required to give an effective annual rate (r), allowing for a given number of compounding periods each year (m). The effective rate allows for compounding, whereas the nominal rate does not allow for compounding.
The Excel RATE function is used to calculate the discount rate (i) in time value of money calculations. For example, it can calculate the interest rate on a loan given the value of the loan, the term and the periodic payments, it can be used to calculate the interest rate earned on a savings account, or the interest rate needed to generate annuity payments from a lump sum investment.
The Excel NPV function is used to calculate the present value of unequal cash flows in time value of money calculations.
To calculate the net present value of a project, the original investment at the start of the project needs to be deducted from the answer provided by the Excel NPV function.
The Excel NPER function is one of many Excel financial functions, and can be used to calculate the number of periods for a lump sum, annuity or annuity due to grow to a future value. In addition the function can also be used to calculate the number of periods it takes for a loan to be repaid.
The Excel PMT function is used to calculate the payment (Pmt) in time value of money calculations. For example, it can calculate the payments needed to clear a loan balance, the deposits to a savings account to grow to a future value, or annuity and annuity due payments from a lump sum investment.
The Excel IRR function is used to calculate internal rate of return for a range of cash flows in time value of money calculations, and has the syntax IRR (Values, Guess).
Care must be taken when using the Excel IRR function with cash flows that change sign multiple times though out the term of the project, as it can produce meaningless solutions.