Excel 2000 in a Nutshell

Name

FV

Synopsis

FV is very useful for determining the future value of an investment. This function is used with both loans and investments, such as a savings account. If you have a loan, the future value of the loan should be 0. This function is used only with investments that have both constant payments and a constant interest rate.

To Calculate

=FV(Rate, Nper, Pmt, PV, Type)

You must specify a value for either the Pmt or PV arguments, but you do not have to specify both. The Type argument is optional; the Rate and Nper arguments must have values.

Rate

Indicates the interest rate used to calculate the rate for each period. For example, if you make monthly payments and the interest rate is 12% you need to specify an interest rate of 0.01 (0.12/12) as the rate for each month.

Pmt

Indicates payment that is made for each period. For example, if you are making monthly payments of $355, that is the value of the Pmt argument. The value of this argument should be negative if the amounts are paid out, such as a loan or deposit in an account. If the payment is received, such as dividend checks, this argument should have a positive value. If you do not specify a value for the Pmt argument you must specify a value for the PV argument.

Note

If you want to determine the future value of an investment with a variable or adjustable interest rate, you need to use FVSCHEDULE.

Example

Figure 12-10 illustrates how FV can be used to determine the future value of an investment if you know the annual interest ...