FV
The FV function returns the future value of an investment based on periodic constant payments and a constant interest rate. The future value is the closing amount that you will receive/pay at the end of the period.
Syntax
FV(Rate, Nper, Pmt?, PV, Type?) - > Number
Arguments
Rate
Number, Node reference
The interest rate per period
Nper
Number
The total number of periods
Pmt?
Number, Node reference
Equal payments paid out each period during the course of the investment term. This is an optional argument.
PV
Number, Node reference
The present value or initial investment. Cash outflows should be negative and cash inflows should be positive.
Type?
Number
Indicates when the payments are made. Type is 0 if the payments are made at the end of the period and 1 if payments are made at the start of the period.
Example
Consider a series of $2000 payments made at the end of each year for 6 years for an investment. The objective is to calculate the future value at the end of 6 years where the interest rate is 5%.
Payment
2000
2000
2000
2000
2000
2000
Interest Rate
5%
5%
5%
5%
5%
5%
Number of periods
1
2
3
4
5
6
To calculate the future value, the following formula should be entered in the [FV] node:
FV([Interest Rate],[Number of Periods],[Payment],0,0)
Result
FV
$2,000.00
$4,100.00
$6,305.00
$8,620.25
$11,051.26
$13,603.83
The value of $2000 keeps increasing at the end of each year by the interest rate of 5% giving a value of 13603.83 by the end of 6 years.
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