XL: Calculating the Future Value of a Single Cash Flow in Excel

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SUMMARY

The FV function in Microsoft Excel returns the future value of an investment based on periodic, constant payments and a constant interest rate.

The FV function can also be used to calculate the future value of a single lump sum payment. To do this, enter the lump sum payment amount as the present value (PV) and enter the payment amount as zero. Entering a zero as the payment amount tells Excel there is no constant stream of payments.

The FV function uses the following syntax and arguments
FV(rate,nper,pmt,pv,type)
where:
Rate is the interest rate per period.

Nper is the total number of payment periods in an annuity.

Pmt is the payment made each period; it cannot change over the life of the annuity. If pmt is omitted, you must include the pv argument.

Pv is the present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt argument.

Type is the number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.
For example, suppose that you will invest $1,000 today at an interest rate of 12 percent, and you would like to know what the investment will be worth at the end of five years.

The FV formula is entered as follows:
=FV(12%,5,0,-1000,0)

REFERENCES

For more information about the future value function, click Microsoft Excel Help on the Help menu, type fv in the Office Assistant or the Answer Wizard, and then click Search to view the topics returned.

Microsoft Excel Functions and Macros, versions 2.x, page 53

Microsoft Excel Function Reference, version 3.0, page 98

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Article ID: 30970 - Last Review: September 19, 2011 - Revision: 3.0
APPLIES TO
  • Microsoft Excel 2000 Standard Edition
  • Microsoft Excel 2002 Standard Edition
  • Microsoft Excel 97 Standard Edition
  • Microsoft Excel 95 Standard Edition
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