FV (Future Value)

The FV (Future Value) function in Microsoft Excel calculates the future value of an investment based on periodic, constant payments and a constant interest rate.

🔹 Syntax of FV function:

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

• rate – The interest rate per period.

• nper – Total number of periods (e.g., months or years).

• pmt – Payment made each period (enter as a negative number).

• pv – Present value or initial investment (optional, default is 0).

• type – When payments are due:

  • 0 = end of period (default),

  • 1 = beginning of period.

🔸 Example Scenario in Excel:

You invest $200 monthly into an account with a 6% annual interest rate (compounded monthly), for 5 years. You want to find the future value.

💡 Excel Example Input:

Description Value

Monthly Interest Rate =6%/12

Number of Periods =5*12

Monthly Payment =-200

Present Value =0

Type =0

Excel Formula:

=FV(6%/12, 5*12, -200, 0, 0)

✅ Output:

=FV(0.005, 60, -200, 0, 0) → $13,931.99

So, after 5 years, you’ll have $13,931.99 saved.