Excel formula: Future value vs. Present value

Explanation

This simple example shows how present value and future value are related. In the example shown, Years, Compounding periods, and Interest rate are linked in columns C and F like this:

F5=C9
F6=C6
F7=C7
F8=C8

The formula to calculate future value in C9 is:

=FV(C8/C7,C6*C7,0,-C5,0)

The formula to calculate present value in F9 is:

=PV(F8/F7,F6*F7,0,-F5,0)

No matter how years, compounding periods, or rate are changed, C5 will equal F9 and C9 will equal F5.

Author

Dave Bruns

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