Documentation/How Tos/Calc: FV function

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 futurevalue 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 payment being made each period for numperiods periods, with a lump sum payment (presentvalue) at the start of the term, 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

Financial functions

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.