# How to use the FV function

**What is the FV function?**

The FV function returns the future value of an investment based on a constant interest rate.

You can use the FV function with either periodic constant payments, or a single lump sum payment.

**What are periodic constant payments?**

Periodic constant payments are payments that are made at regular intervals such as monthly, quarterly, or yearly and have the same amount each time.

**What is a constant interest rate?**

A fixed interest rate is an interest rate that remains the same throughout the term of a loan or an investment.

**What is a single lump sum payment?**

A single lump sum payment refers to making a financial payment in full all at once, instead of in multiple payments over time.

**What is the present value?**

The present value is the initial amount that also will earn interest.

**Related functions**

Function | Description |
---|---|

RATE(nper, pmt, pv, [fv], [type]) | Returns the interest rate per period of an annuity |

PV(rate, nper, pmt, [fv], [type]) | Returns the present value of an investment. |

FV(rate, nper, pmt, [pv], [type]) | Returns the future value of an investment. |

PDURATION(rate, pv, fv) | Returns the periods needed for an investment to reach a future value. |

### FV function Syntax

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

### FV function Arguments

rate |
Required. The interest rate you want to use. |

nper |
Required. The total number of payments. |

pmt |
Required. The payment made each period. |

[pv] |
Optional. The present value. |

[type] |
Optional. When payments are due. 0 (zero) is the defaultÂ value. 0 - At the end of the period. 1 - At the beginning of the period. |

- If pmt is omitted the pv argument must be included.
- You must include the pmt argument if the pv argument is omitted. It is then assumed to be 0 (zero).
- It is possible to use both the pv and pmt arguments at the same time.

**Why is pv and pmt arguments entered as negative values in the FV function?**

In the FV (Future Value) function, the pv and pmt arguments are typically entered as negative values for a specific reason.Â Cash inflows are represented as positive values, and cash outflows are negative values.

### FV function Example 1

Formula in cell B3:

The picture above shows a table that calculates the future value of $1000 with 10% interest rate for 5 years.

### FV function Example 2

The FV function calculatesÂ the future value if you save $1000 each year with an interest rate of 10% for five years.

### Functions in 'Financial' category

The FV function function is one of 29 functions in the 'Financial' category.

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