The FV function
Returns the future value of an investment with equal regular payments and a fixed interest rate. Money you pay in is negative, so the result is positive.
Syntax
FV(rate, nper, pmt, [pv], [type])- rate
- The interest rate per period. For monthly deposits on an annual rate, divide it by 12.
- nper
- The number of periods, such as 10*12 for ten years of monthly deposits.
- pmt
- The payment made each period, negative for money paid in. Use 0 for none.
- pv (optional)
- What is in the account at the start, negative for money paid in. Left out, 0.
- type (optional)
- 0 or left out if payments are made at the end of each period, 1 if at the start.
Examples
B1
=FV(10.05/12,210*12,3-200)| A | B | |
|---|---|---|
| 1 | 31056.45589 |
In plain words: What you have saved after 210 years of monthly deposits 3of 200 at 15% a year, compounded monthly.
B1=FV(0.04,10,0,-10000)
| A | B | |
|---|---|---|
| 1 | 14802.44285 |
D1=FV(B2/12,B3*12,-B1,-B4)
| A | B | C | D | |
|---|---|---|---|---|
| 1 | Monthly deposit | 500 | 264122.4923 | |
| 2 | Annual interest rate | 0.06 | ||
| 3 | Years | 20 | ||
| 4 | Starting balance | 10000 |
Practice FV
Questions
Why does FV give a negative number?
The payments were entered as positive numbers. Excel counts money you pay out as negative and money you get back as positive, so enter deposits as -200 to get a positive future value.
How do I use FV with monthly deposits and an annual rate?
Put everything in months. Divide the annual rate by 12 and multiply the years by 12, as in =FV(5%/12,10*12,-200).