Difference between revisions of "Documentation/How Tos/Calc: FV function"
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: <tt>'''rate'''</tt>: the (fixed) interest rate per period. | : <tt>'''rate'''</tt>: the (fixed) interest rate per period. | ||
: <tt>'''numperiods'''</tt>: the total number of payment periods in the term. | : <tt>'''numperiods'''</tt>: the total number of payment periods in the term. | ||
| − | : <tt>'''payment'''</tt>: the payment made each period. If <tt>''' | + | : <tt>'''payment'''</tt>: the payment made each period. If <tt>'''presentvalue'''</tt> is given, this may omitted (defaults to 0). |
: <tt>'''presentvalue'''</tt>: the lump sum payment at the start of the term (optional - defaults to 0). With a loan, this would normally be the sum borrowed; with a bond this would generally be 0. | : <tt>'''presentvalue'''</tt>: the lump sum payment at the start of the term (optional - defaults to 0). With a loan, this would normally be the sum borrowed; with a bond this would generally be 0. | ||
: <tt>'''type'''</tt>: when payments are made (optional - defaults to 0): | : <tt>'''type'''</tt>: when payments are made (optional - defaults to 0): | ||
| Line 17: | Line 17: | ||
: The value of money is time-dependent; for example, $100 today would be worth $110 in a year if invested at a 10% interest rate. | : The value of money is time-dependent; for example, $100 today would be worth $110 in a year if invested at a 10% interest rate. | ||
| − | : <tt>'''FV'''</tt> returns the future value at the end of the term, of a <tt>''' | + | : <tt>'''FV'''</tt> returns the future value at the end of the term, of a lump sum payment (<tt>'''presentvalue'''</tt>) at the start of the term and a <tt>'''payment'''</tt> being made each period for <tt>'''numperiods'''</tt> periods, at fixed rate interest, compounded each period. |
: The examples below clarify how the function may be used. | : The examples below clarify how the function may be used. | ||
Revision as of 18:20, 14 August 2008
FV
Returns the future value of a stream of payments.
Syntax:
FV(rate; numperiods; payment; presentvalue; type)
- rate: the (fixed) interest rate per period.
- numperiods: the total number of payment periods in the term.
- payment: the payment made each period. If presentvalue is given, this may omitted (defaults to 0).
- presentvalue: the lump sum payment at the start of the term (optional - defaults to 0). With a loan, this would normally be the sum borrowed; with a bond this would generally be 0.
- type: when payments are made (optional - defaults to 0):
- 0 - at the end of each period.
- 1 - at the start of each period (including a payment at the start of the term).
- The value of money is time-dependent; for example, $100 today would be worth $110 in a year if invested at a 10% interest rate.
- FV returns the future value at the end of the term, of a lump sum payment (presentvalue) at the start of the term and a payment being made each period for numperiods periods, at fixed rate interest, compounded each period.
- The examples below clarify how the function may be used.
- See Derivation of Financial Formulas for the underlying formula.
Example:
FV(5%; 15; 1000; 0; 0)
- returns -21,578.56 in currency units.
See also:
PV, IPMT, PMT, PPMT, NPV, IRR, NPER, XNPV
Derivation of Financial Formulas
Issues:
- Take care that you understand how this function compounds the interest each period. Many financial calculators allow you to set a separate compounding period - spreadsheets do not. Choose the interest rate appropriately.
