Excel FV function

The Excel FV function is a financial function that returns the future value of an investment. You can use the FV function to get the future value of an investment assuming periodic, constant payments with a constant interest rate.

Purpose

Get the future value of an investment

Return value

future value

Syntax

=FV(rate,nper,pmt,[pv],[type])

rate - The interest rate per period.
nper - The total number of payment periods.
pmt - The payment made each period. Must be entered as a negative number.
pv - [optional] The present value of future payments. If omitted, assumed to be zero. Must be entered as a negative number.
type - [optional] When payments are due. 0 = end of period, 1 = beginning of period. Default is 0.

How to use

The future value (FV) function calculates the future value of an investment assuming periodic, constant payments with a constant interest rate.

Notes:

1. Units for rate and nper must be consistent. For example, if you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 (annual rate/12 = monthly interest rate) for rate and 4*12 (48 payments total) for nper. If you make annual payments on the same loan, use 12% (annual interest) for rate and 4 (4 payments total) for nper.

2. If pmt is for cash out (i.e deposits to saving, etc), payment value must be negative; for cash received (income, dividends), payment value must be positive.

FV function examples

Bond valuation example

In the example shown, we have a 3-year bond with a face value of $1,000. The coupon rate is 7% so the bond will pay 7% of the $1,000 face value in interest every year, or $70. However, because interest is paid semiannually in two equal payments, there will be 6 coupon payments of $35 each. The $1,...

Estimate mortgage payment

In this example, the goal is to calculate a monthly mortgage payment based on three inputs: The loan amount The annual interest rate The loan term in years The worksheet shown also takes into account the down payment, which is calculated using a simple formula in C8 (see below) and then subtracted...

Compare effect of compounding periods

The FV function calculates compound interest and returns the future value of an investment over a specified term. To configure the function, we need to provide a rate, the number of periods, the periodic payment, and the present value: Present value ( pv ) is the named range G4 Rate is provided as...

Future value of annuity

The FV function is a financial function that returns the future value of an investment. You can use the FV function to get the future value of an investment assuming periodic, constant payments with a constant interest rate. An annuity is a series of equal cash flows, spaced equally in time. In...

Calculate periods for annuity

The NPER function returns the number of periods for loan or investment. You can NPER to get the number of payment periods for a loan, given the amount, the interest rate, and periodic payment amount. An annuity is a series of equal cash flows, spaced equally in time. The goal in this example is to...

Present value of annuity

The PV function is a financial function that returns the present value of an investment. You can use the PV function to get the value in today's dollars of a series of future payments, assuming periodic, constant payments and a constant interest rate. An annuity is a series of equal cash flows,...

Calculate compound interest

Compound interest is a financial concept that describes how an initial investment grows over time, taking into account not only the interest earned on the initial amount but also the interest earned on the interest itself. Compound interest allows your money to grow exponentially, which makes it a...

Future value vs. Present value

The FV function is a financial function that returns the future value of an investment, given periodic, constant payments with a constant interest rate. The PV function returns the present value of an investment. You can use the PV function to get the value in today's dollars of a series of future...

Annual compound interest schedule

If you have an annual interest rate, and a starting balance you can calculate interest with: =balance * rate and the ending balance with: =balance+(balance*rate) So, for each period in the example, we use this formula copied down the table: =C5+(C5*rate) With the FV function The FV function can...

Payment for annuity

The PMT function is a financial function that returns the periodic payment for a loan. You can use the PMT function to figure out payments for a loan, given the loan amount, number of periods, and interest rate. An annuity is a series of equal cash flows, spaced equally in time. The goal in this...

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The Excel PPMT function can be used to calculate the principal portion of a given loan payment. For example, you can use PPMT to calculate the principal amount of a payment for the first period, the last period, or any period in between.

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