FV FunctionWayne Becker20150902T16:51:47+00:00
The FV function calculates the Future Value of an investment with periodic constant payments and a constant interest rate.
Syntax
=FV(rate,nper,[pmt],[pv],[type])
Arguments
Argument 
Description 
rate 
The interest rate per period 
nper 
The number of periods for the lifetime of the annuity 
[pmt] 
Optional. Specifies the payment per period. If omitted:

• 
the [pv] argument must be supplied 

[pv] 
Optional. Specifies the present value of the annuity – i.e. the amount that a series of future payments is worth now. If omitted:

• 
it takes on the default value 0 

• 
the [pmt] argument must be supplied 

[type] 
Optional. Defines whether the payment is made at the start or the end of the period.
The type argument can have the value 0 or 1, meaning: 

0 
– 
the payment is made at the end of the period 

1 
– 
the payment is made at the beginning of the period 
If the type argument is omitted, it takes on the default value of 0, denoting payments made at the end of the period. 

Examples
Example 1
The following spreadsheet shows the FV function used to calculate the future value of an investment of $1,000 per month for a period of 5 years. The present value is 0, the interest rate is 5% per year and the payments are made at the end of each month.

A 
B 
C 
1 
Data 


2 
5% 
Annual interest rate 
3 
60 
Number of payments (5 yrs x 12 mo) 
4 
$1,000.00 
Periodic payment – [pmt] is negative as the periodic payments are paid out 
5 
$0.00 
Present value 
6 



7 
Formula 
Result 
Notes 
8 
=FV(A2/12,A3,A4) 
$68,006.08 
Future value of an investment with the above terms. Note the annual interest rate is divided by 12 because it is compounded monthly 
Example 2
The spreadsheet below shows the FV function used to calculate the future value of an investment of $2,000 per quarter for a period of 4 years. The interest is 10% per year and each payment is made at the start of the quarter.

A 
B 
C 
1 
Data 


2 
10% 
Annual interest rate 
3 
16 
Number of payments (4 yrs x 4 qtr) 
4 
$2,000.00 
Periodic payment – [pmt] is negative as the periodic payments are paid out 
5 
$0.00 
Present value 
6 



7 
Formula 
Result 
Notes 
8 
=FV(10%/4,16,2000,0,1) 
$39,729.46 
Future value of an investment with the above terms. Note the annual interest rate is divided by 4 because it is compounded quarterly 
Cash Flow Convention: In line with general cash flow conventions, outgoing payments are represented by negative numbers and incoming payments are represented by positive numbers.
Common Function Error(s)
Problem 
What went wrong 
#VALUE 
Occurs if any of the supplied arguments are nonnumeric 