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FV

FV

  • Last updated on
Related to spreadsheet functions chains

Description

Use this function to calculate the future value of an investment, assuming constant periodic payments and a constant interest rate. Supported in Chains. 

 

Syntax

FV(rate,nper,pmt,[pv],[type])

 

Inputs

This function accepts the following arguments:

Name Required Description Valid input
rate Yes The interest rate per period. A numeric value representing the interest rate per period. This can be a number, a reference to a cell containing a number, or a formula which results in either of these. 
nper Yes The total number of payment periods in an annuity. A positive integer representing the number of periods. This can be a number, a reference to a cell containing a number, or a formula which results in either of these.
pmt Yes The payment made each period; it cannot change over the life of the annuity.
Typically, this value contains both principal and interest but no other fees or taxes. If pmt is omitted, the pv argument must be included.		 A numeric value representing the payment amount. This can be a number, a reference to a cell containing a number, or a formula which results in either of these.
pv No The present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt argument. A numeric value representing the present value. If omitted, it is assumed to be 0. This can be a number, a reference to a cell containing a number, or a formula which results in either of these. 
type No Indicates when payments are due. Either "0" for payments due at the end of the period or "1" for payments due at the beginning of the period. If omitted, it is assumed to be 0.

 

Example

Sample data

  A B C
1 Rate Term Amount
2 0.06 10 $200
3 0.08 5 $500
4 0.05 20 $1,000
5 0.07 15 $300

Sample formulas

Use case Formula Explanation and Result
Calculate the future value of a fixed value for annual payments for a period of time years at a specified interest rate, with all values in cells. =FV(A2,B2,-C2)

This formula works by calculating the future value of $200 annual payments (C2) for 10 years (B2) at an interest rate of 6% (A2).

For this data set, this formula returns 2636.16.
Calculate the future value of a fixed value for annual payments for a period of time in years at a specified interest rate, with all values in cells. =FV(A3/12,B3*12,-C3)

This formula works by calculating the future value of $500 monthly payments (C3) for 5 years (B3) at an annual interest rate of 8% (A3), converted to a monthly rate by dividing by 12.

For this data set, this formula returns 36,742.26.
Calculate the future value of a one-time investment after a set period at a specified annual interest rate, with all values in cells. =FV(A4,B4,0,-C4)

This formula works by calculating the future value of a one-time investment of $1,000 (C4) after 20 years (B4) at an annual interest rate of 5% (A4).

For this data set, this formula returns 2,653.30.
Calculate the future value of a fixed value quarterly payment for a specified period in years at a specified annual interest rate, with all values in cells, with payments at the beginning of each period. =FV(A5/4,B5*4,-C5,0,1)

This formula works by calculating the future value of $300 quarterly payments (C5) for 15 years (B5) at an annual interest rate of 7% (A5), divided by 4 to convert to a quarterly rate. The payments are made at the beginning of each period, as indicated by the final argument 1.

For this data set, this formula returns 30,179.11.
Calculate the future value of a fixed value semi-annual payment for a specified period in years at a specified annual interest rate (having all these values in cells), with a specified initial investment. =FV(A2/2,B2*2,-C2/2,-1000)

This formula works in the following manner:

It calculates the future value of $100 semi-annual payments (that is, C2/2) for 10 years (B2) at an annual interest rate of 6% (A2), divided by 2 to convert to a semi-annual rate. It also includes an initial investment of $1,000 as the present value.

For this data set, this formula returns 6,984.47.

 

Notes

  • The FV function calculates the future value of an investment based on periodic, constant payments and a constant interest rate.
  • Make sure to use consistent units for  If rate is per year and payments are monthly, use rate/12 and nper*12.
  • Make sure that you are consistent about the units you use for specifying AAA rate and nper.
    For example, if you make monthly payments on a five-year loan at 10 percent annual interest, use "10%/12" for rate and "5*12" for nper. If you make annual payments on the same loan, you should use "10%" for rate and "5" for nper.
  • The pmt argument is negative if you're paying out money, and positive if you're receiving money.

 

Tips

  • Use FV in combination with other financial functions such as PV and PMT for comprehensive financial analysis.
  • When working with monthly payments and annual interest rates, remember to adjust your rate and nper values accordingly.

 

Related functions

FV
IRR
NPV
PMT
PV
XIRR
XNPV

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Description Use this function to calculate the future value of an investment, assuming constant periodic payments and...