FV
The FV function returns the future value of an investment based on a series of regular periodic cash flows (payments of a constant amount and all cash flows at constant intervals) and at a fixed interest rate.
FV(periodic-rate, num-periods, payment, present-value, when-due)
periodic-rate: A number value representing the interest rate per period. periodic-rate is entered as a decimal (for example, 0.08) or with a percent sign (for example, 8%). periodic-rate is specified using the same time frame (for example, monthly, quarterly, or annually) as num-periods. For example, if num-periods represents months and the annual interest rate is 8%, periodic-rate is specified as 0.00667 or 0.667% (0.08 divided by 12). periodic-rate can be negative, but the result returned by the function may be difficult to interpret.
num-periods: A number value representing the number of periods. num-periods is specified using the same time frame (for example, monthly, quarterly, or annually) as periodic-rate. num-periods must be greater than or equal to 0.
payment: A number value representing the payment made or amount received each period. payment is often formatted as currency. At each period, an amount received is a positive amount and an amount invested is a negative amount. For example, it could be a monthly loan payment (negative) or the periodic payment received on an annuity (positive).
present-value: A number value representing the initial investment, or the amount of the loan or annuity. present-value is often formatted as currency. At time 0, an amount received is a positive amount and an amount invested is a negative amount. For example, it could be an amount borrowed (positive) or the initial payment made on an annuity contract (negative). If payment is specified and there is no initial investment, present-value may be omitted.
when-due: An optional modal value that specifies whether payments are at the beginning or end of each period. Most mortgage and other loans require the first payment at the end of the first period (0), which is the default. Most lease and rent payments, and some other types of payments, are due at the beginning of each period (1).
end (0 or omitted): Payment is treated as being received or made at the end of each period.
beginning (1): Payment is treated as being received or made at the beginning of each period.
Notes
The currency shown in this function result depends on your Language & Region settings (in System Preferences in macOS 12 and earlier, System Settings in macOS 13 and later, and Settings in iOS and iPadOS).
Example 1 |
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Suppose you are planning for your daughter’s college education. She has just turned 3 and you expect she will begin college in 15 years. You have $50,000 (present-value is -50000) to set aside in a savings account today and can add $200 (payment is -200) to the account at the beginning of each month (when-due is 1). Over the next 15 years (num-periods is 15*12), the savings account is expected to earn an annual interest rate of 4.5% (periodic-rate is 0.045/12), and pays interest monthly. =FV(0.045/12, 15*12, -200, -50000, 1) returns $149,553.00, the expected value of this savings account at the time your daughter begins college. |
Example 2 |
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Suppose you are presented with an investment opportunity. The opportunity requires that you invest $50,000 in a discount security today (present-value is -50000) and then nothing further (payment is 0). The discount security matures in 14 years (num-periods) and returns $100,000 at maturity. Your alternative is to leave your money in your money market savings account where it is expected to earn an annual yield of 5.25% (periodic-rate). One way to evaluate this opportunity would be to consider how much the $50,000 would be worth at the end of the investment period and compare that to the redemption value of the security. =FV(0.0525, 14, 0, -50000, 0) returns $102,348.03, the future value of the money market account at the end of 14 years, assuming an annual interest rate of 5.25%. Therefore, all else being equal, and if all assumptions happen as expected, it would be better to keep the money in the money market account because its value after 14 years ($102,348.03) exceeds the redemption value of the security ($100,000). |