Excel FV function

FV is an Excel financial function that returns the future value of an investment

based on a fixed interest rate. It works for both a series of periodic payments
and a single lump-sum payment.
The function is available in all versions Excel 365, Excel 2019, Excel 2016,
Excel 2013, Excel 2010 and Excel 2007.

Rate (required) - the interest rate per period. If you pay once a year, supply an
annual interest rate; if you pay each month, then you should specify a monthly
interest rate, and
Pmt (optional) so on.
- the constant amount paid each period. Should be expressed as a
negative number. If omitted, it is assumed to be 0, and the pv argument must be
included.
Type (optional) - indicates when the payments are made:
0 or omitted (default) - at the end of a period (regular annuity)
1 - at the beginning of a period (annuity due)

4 things to remember about Excel FV function

To correctly build a FV formula in your worksheets and avoid common errors,
please keep in mind these usage notes:
1. For any inflows such as dividends or other earnings, use positive numbers.
For any outflows such as deposits to a saving or investing account,
2. If the present value (pv) is zero or omitted, the payment amount (pmt) must
use negative numbers.
4.
be To
3. get the and
included, correct
The rate argumentvicefuture
bevalue,
versa.
can you must
expressed be consistent
as a percentage or with nper and rate.
decimal number, e.g.
For instance,
8% or 0.08. if you make 3 yearly payments at an annual interest rate of 5%,
use 3 for nper and 5% for rate. If you do a series of monthly investments for a
period of 3 years, then use 3*12 (a total of 36 payments) for nper and 5%/12
for rate.
The FV syntax is as follows:

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

Nper (required) - the total number of payment periods for the lifetime of an

annuity.
Pv (optional) - the present value of the investment. Should be represented by a
negative number. If omitted, it defaults to 0, and the pmt argument must be
included.
you are going to make a yearly $1,000 payment for 10 years with an annual
interest rate of 6%. It is assumed to be a regular annuity where all
payments are made at the end of the year.
DESCRIPTION DESCRIPTION
PERIODIC INTEREST RATE rate 6% PERIODIC INTEREST RATE rate 6%
NO. OF PERIODS nper 10 NO. OF PERIODS nper 10
PERIODIC PAYMENT pmt -1000 PERIODIC PAYMENT pmt 1000

fv ₹ 13,180.79 ₹ -13,180.79
 When investing money through a series of regular savings, it
often happens that you are provided with an annual interest
rate and the investment term defined in years, whereas the
payments are to be made weekly, monthly, quarterly or
semiannually. In such situations, it is very important that
the rate and nper units be consistent.
To convert an annual interest rate to a periodic rate, divide the annual rate by the number of periods per year:

Monthly payments: rate = annual interest rate / 12

Quarterly payments: rate = annual interest rate / 4
Semiannual payments: rate = annual interest rate / 2

To get the total number of periods, multiply the term in years by the number of periods per year:

Monthly payments: nper = no. of years * 12

Quarterly payments: nper = no. of years * 4
Semiannual payments: nper = no. of years * 2

you monthly invest $200 for 3 years with an annual interest rate of 6%. The source data is input in these cells:

Annual interest rate 6%

No. of years 3
Monthly payment 200
Periods per year 12

fv ₹ 7,867.22
FV formula for lump-sum investment

If you choose to invest money as a one-time lump sum payment, the future value formula is based on the present value (pv) rather than periodic

So, we set up our sample data as follows:

Annual interest rate 7%

No. of years 5
Present value -1000

fv ₹ 1,402.55
pv) rather than periodic payment (pmt).
CompoundePeriods per year Future value
Weekly 52 $1,283.87 Annual interest rate 5%
Monthly 12 $1,283.36 No. of years 5
Quarterly 4 $1,282.04 Investment -$1,000
Semiannuall 2 $1,280.08
Annually 1 $1,276.28