FV function: Description, Usage, Syntax, Examples and Explanation
What is FV function in Excel?
FV function is one of the Financial functions in Microsoft Excel that calculates the future value of an investment based on a constant interest rate. You can use FV with either periodic, constant payments, or a single lump sum payment.
Syntax of FV function
FV(rate,nper,pmt,[pv],[type])
For a more complete description of the arguments in FV and for more information on annuity functions, see PV.
The FV function syntax has the following arguments:
- Rate: The interest rate per period.
- Nper: The total number of payment periods in an annuity.
- Pmt: The payment made each period; it cannot change over the life of the annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you must include the pv argument.
- Pv ( Optional): The present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt argument.
- Type( Optional): The number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.
Set type equal to | If payments are due |
At the end of the period | |
1 | At the beginning of the period |
FV formula explanation
- Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12% for rate and 4 for nper.
- For all the arguments, cash you pay out, such as deposits to savings, is represented by negative numbers; cash you receive, such as dividend checks, is represented by positive numbers.
Examples of FV function
Steps to follow:
1. Open a new Excel worksheet.
2. Copy data in the following table below and paste it in cell A1
Note: For formulas to show results, select them, press F2 key on your keyboard and then press Enter.
You can adjust the column widths to see all the data, if need be.
Example 1
Data | Description | |
0.06 | Annual interest rate | |
12 | Number of payments | |
-100 | Amount of the payment | |
-1000 | Present value | |
1 | Payment is due at the beginning of the year (0 indicates end of year) | |
Formula | Description | Result |
=FV(A2/12, A3, A4, A5, A6) | Future value of an investment using the terms in A2:A5. | $2,301.40 |
Example 2
Data | Description | |
0.11 | Annual interest rate | |
35 | Number of payments | |
-2000 | Amount of the payment | |
1 | Payment is due at the beginning of the year (0 indicates end of year) | |
Formula | Description | Result |
=FV(A2/12, A3, A4,, A5) | Future value of an investment with the terms in cells A2:A4 | $82,846.25 |
Example 3
Data | Description | |
0.06 | Annual interest rate | |
10 | Number of payments | |
-200 | Amount of the payment | |
-500 | Present value | |
1 | Payment is due at the beginning of the period (0 indicates payment is due at end of period) | |
Formula | Description | Result |
=FV(A2/12, A3, A4, A5, A6) | Future value of an investment using the terms in A2:A5. | $2,581.40 |
Example 4
Data | Description | |
0.12 | Annual interest rate | |
12 | Number of payments | |
-1000 | Amount of the payment | |
Formula | Description | Result |
=FV(A2/12, A3, A4) | Future value of an investment using the terms in A2:A4. | $12,682.50 |
For more information about annuity functions, visit: