FV function

Returns the future value of an investment based on periodic, constant payments and a constant interest rate.

Syntax

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

For a more complete description of the arguments in FV and for more information on annuity functions, see PV.

Rate     is the interest rate per period.

Nper     is the total number of payment periods in an annuity.

Pmt     is the payment made each period; it cannot change over the life of the annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you must include the pv argument.

Pv     is 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.

Type     is the number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.

Set type equal to

If payments are due

0

At the end of the period

1

At the beginning of the period


Remarks

  • Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12% for rate and 4 for nper.

  • For all the arguments, cash you pay out, such as deposits to savings, is represented by negative numbers; cash you receive, such as dividend checks, is represented by positive numbers.

Example 1

The example may be easier to understand if you copy it to a blank worksheet.

How to copy an example

  1. Create a blank workbook or worksheet.

  2. Select the example in the Help topic.

    Note   Do not select the row or column headers.

    Selecting an example from Help

    Selecting an example from Help

  3. Press CTRL+C.

  4. In the worksheet, select cell A1, and press CTRL+V.

  5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

1

2

3

4

5

6

A

B

Data

Description

6%

Annual interest rate

10

Number of payments

-200

Amount of the payment

-500

Present value

1

Payment is due at the beginning of the period (see above)

Formula

Description (Result)

=FV(A2/12, A3, A4, A5, A6)

Future value of an investment with the above terms (2581.40)

Note    The annual interest rate is divided by 12 because it is compounded monthly.

Example 2

The example may be easier to understand if you copy it to a blank worksheet.

How to copy an example

  1. Create a blank workbook or worksheet.

  2. Select the example in the Help topic.

    Note   Do not select the row or column headers.

    Selecting an example from Help

    Selecting an example from Help

  3. Press CTRL+C.

  4. In the worksheet, select cell A1, and press CTRL+V.

  5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

1

2

3

4

A

B

Data

Description

12%

Annual interest rate

12

Number of payments

-1000

Amount of the payment

Formula

Description (Result)

=FV(A2/12, A3, A4)

Future value of an investment with the above terms (12,682.50)

Note    The annual interest rate is divided by 12 because it is compounded monthly.

Example 3

The example may be easier to understand if you copy it to a blank worksheet.

How to copy an example

  1. Create a blank workbook or worksheet.

  2. Select the example in the Help topic.

    Note   Do not select the row or column headers.

    Selecting an example from Help

    Selecting an example from Help

  3. Press CTRL+C.

  4. In the worksheet, select cell A1, and press CTRL+V.

  5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

1

2

3

4

5

A

B

Data

Description

11%

Annual interest rate

35

Number of payments

-2000

Amount of the payment

1

Payment is due at the beginning of the year (see above)

Formula

Description (Result)

=FV(A2/12, A3, A4,, A5)

Future value of an investment with the above terms (82,846.25)

Note    The annual interest rate is divided by 12 because it is compounded monthly.

Example 4

The example may be easier to understand if you copy it to a blank worksheet.

How to copy an example

  1. Create a blank workbook or worksheet.

  2. Select the example in the Help topic.

    Note   Do not select the row or column headers.

    Selecting an example from Help

    Selecting an example from Help

  3. Press CTRL+C.

  4. In the worksheet, select cell A1, and press CTRL+V.

  5. To switch between viewing the results and viewing the formulas that return the results, press CTRL+` (grave accent), or on the Formulas tab, in the Formula Auditing group, click the Show Formulas button.

1

2

3

4

5

6

A

B

Data

Description

6%

Annual interest rate

12

Number of payments

-100

Amount of the payment

-1000

Present value

1

Payment is due at the beginning of the year (see above)

Formula

Description (Result)

=FV(A2/12, A3, A4, A5, A6)

Future value of an investment with the above terms (2301.40)

Note    The annual interest rate is divided by 12 because it is compounded monthly.

Applies To: Excel 2007



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