fv (future value) Function |
fv is a financial function that gives the future value of an investment based on equal payments and the interest earned during the period. It assumes payments are made at the end of each period.
Use fv to calculate the results of investing at a specified rate for a specified length of time.
Syntax:
fv(payment, interest, term)
payment: the value of each payment.
interest: the interest rate in percent.
term: the number of payment periods.
Interest and term must be for the same period such as monthly or yearly. Fv assumes the payment occurs at the end of each period. If each payment occurs at the beginning of each period, multiply fv by (1 + interest).
Example:
Find how much you will have if you save $6000 at the end of each year for 20 years at 7.5% annual rate.
fv(6000, 7.5, 20) gives $259,828.
If you save $500 at the end of each month for 20 years at 7.5% annual rate, how much more money will you have?
fv(500, 7.5/12, 20*12) gives $276,865. The monthly savings yields $17,037 more than the annual savings over 20 years.