Excel FV Function
last modified April 4, 2025
The FV function calculates the future value of an investment based
on periodic, constant payments and a constant interest rate. This tutorial
provides a comprehensive guide to using the FV function with
detailed examples. You'll learn basic syntax, practical applications, and
advanced techniques to master this financial function.
FV Function Basics
The FV function calculates the future value of an investment. It
considers regular payments, interest rate, and time period. The syntax includes
required and optional arguments for flexibility.
| Component | Description |
|---|---|
| Function Name | FV |
| Syntax | =FV(rate, nper, pmt, [pv], [type]) |
| Arguments | rate, nper, pmt, [pv], [type] |
| Return Value | Future value of investment |
This table breaks down the essential components of the FV
function. It shows the function name, syntax format, arguments, and return
value characteristics. All arguments except pv and type are required.
Basic FV Example
This example demonstrates the simplest use of the FV function with regular payments and interest rate.
=FV(5%/12, 10*12, -100)
This formula calculates the future value of $100 monthly payments for 10 years at 5% annual interest. The result will be $15,528.23. The negative payment indicates cash outflow.
FV with Lump Sum Investment
This example shows how to calculate future value with an initial lump sum investment plus regular contributions.
| A | B |
|---|---|
| Annual Rate | 6% |
| Years | 5 |
| Monthly Payment | -200 |
| Initial Investment | -5000 |
| Future Value | =FV(B1/12, B2*12, B3, B4) |
The table shows parameters for calculating future value with both initial investment and regular contributions. The formula divides the annual rate by 12 for monthly compounding.
=FV(B1/12, B2*12, B3, B4)
This formula calculates the future value of $5,000 initial investment plus $200 monthly payments for 5 years at 6% annual interest. The result is $19,560.81. Both payment and pv are negative representing cash outflows.
FV with Payments at Beginning of Period
This example demonstrates using the type argument to specify payments at the beginning of each period.
| A | B |
|---|---|
| Quarterly Rate | 2% |
| Periods | 20 |
| Payment | -500 |
| Type | 1 |
| Future Value | =FV(B1, B2, B3, 0, B4) |
The table shows parameters for calculating future value with payments at period start. Type=1 changes payment timing, increasing the future value compared to end-of-period payments.
=FV(B1, B2, B3, 0, B4)
This formula calculates future value of $500 quarterly payments for 20 periods at 2% per quarter, with payments at period start. The result is $12,148.68. Setting type to 1 yields higher FV than default end-of-period payments.
FV for Retirement Savings
This practical example shows how to project retirement savings using the FV function with realistic parameters.
| A | B |
|---|---|
| Annual Return | 7% |
| Years to Retirement | 30 |
| Monthly Contribution | -1000 |
| Current Savings | -50000 |
| Retirement Value | =FV(B1/12, B2*12, B3, B4) |
The table demonstrates retirement planning with current savings and regular contributions. The formula converts annual parameters to monthly equivalents for accurate compounding.
=FV(B1/12, B2*12, B3, B4)
This formula projects $1,000 monthly contributions plus $50,000 initial investment over 30 years at 7% annual return. The future value is $1,522,764.47. Negative values represent cash outflows (investments).
FV for Loan Balance
This example shows how to use FV to calculate remaining loan balance after making payments for a certain period.
| A | B |
|---|---|
| Annual Rate | 4.5% |
| Loan Term (years) | 30 |
| Loan Amount | 250000 |
| Years Paid | 10 |
| Remaining Balance | =FV(B1/12, B4*12, PMT(B1/12,B2*12,B3), -B3) |
The table shows loan parameters and calculates remaining balance after 10 years. It uses PMT to calculate the monthly payment first, then FV to find the remaining balance.
=FV(B1/12, B4*12, PMT(B1/12,B2*12,B3), -B3)
This formula calculates remaining balance on a $250,000 loan at 4.5% after 10 years of 30-year term. The result is $202,907.93. The PMT function calculates the monthly payment used in FV calculation.
FV with Variable Rates
This advanced example shows how to approximate FV with variable interest rates using multiple FV calculations.
| A | B |
|---|---|
| Initial Investment | -10000 |
| Year 1 Rate | 5% |
| Year 2 Rate | 4.5% |
| Year 3 Rate | 6% |
| Future Value | =FV(B2,1,0,B1)*FV(B3,1,0,1)*FV(B4,1,0,1) |
The table demonstrates calculating future value with changing annual rates. Each FV calculation compounds the result for one year at that year's specific rate.
=FV(B2,1,0,B1)*FV(B3,1,0,1)*FV(B4,1,0,1)
This formula calculates future value of $10,000 investment with rates changing annually. The result is $11,623.70. Each FV segment handles one year's growth, chaining results together.
The FV function is essential for financial planning in Excel. From
simple savings to complex loans, FV helps project investment
growth. Mastering its arguments and applications will improve your financial
analysis. Remember that payment and present value typically use negative
numbers to represent cash outflows.
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