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, nper, 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 default 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. 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 calculates 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.
How to comment
How to add a formula to your comment
<code>Insert your formula here.</code>
Convert less than and larger than signs
Use html character entities instead of less than and larger than signs.
< becomes < and > becomes >
How to add VBA code to your comment
[vb 1="vbnet" language=","]
Put your VBA code here.
[/vb]
How to add a picture to your comment:
Upload picture to postimage.org or imgur
Paste image link to your comment.
Contact Oscar
You can contact me through this contact form