FV()

FV()

Category: Financial

Syntax: FV ( payment ; interestRate ; periods )

Parameters: payment ”the nominal amount of the payment; interestRate ”the per-period interest rate; periods ”the number of periods in the duration of the investment.

Description: Returns the future value of a periodic investment based on the payments and interest rate for the number of periods specified.

Examples:

 FV ( 50 ; .10 ; 2 ) 

Returns 105 , indicating the amount of money you would have after making 2 periodic deposits of $50 into an investment that paid 10% per period.

If the investment compounds monthly, divide the annual interestRate by 12 to express the periods as a number of months.

To figure out the future value of monthly investments of $250, earning 8% interest, for 10 years , you would use the formula:

 FV ( 250 ; .08/12 ; 10 * 12) 

which returns 45736.51

Comments:

The FV() function doesn't account for the present value of your investment, and it assumes that payments are made at the end of each period.