FV (future value)
FV Function
Computes the future value of an investment based on periodic, constant payments and a constant interest rate.
Syntax
FV(scalar Rate, scalar NumberOfPeriods, scalar Payment, scalar PresentValue, scalar PayBeginOfPeriod)
Arguments
| Argument | Description |
|---|---|
scalar Rate | Interest rate per period (eg., when working with monthly payments on an investment with an annual rate of 12%, enter 1% as the monthly rate) |
scalar NumberOfPeriods | Total number of payments over the life of the investment (eg., monthly payments on a 3-year loan would have 36 periods; annual payments on the same loan would have 3 periods) |
scalar Payment | Payment made each period; must be consistent over the life of the investment |
scalar PresentValue | Present value or the total amount the investment is worth now |
scalar PayBeginOfPeriod | Whether payment is made at beginning of period, where 1=true, payment is made at beginning of period and 0=false, payment is NOT made at beginning of period (that is, payment is made at end of period) |
Examples:
FV((5/100)/12, 36, -500, -20000, 0)
Returns the future value of an investment ,where for example you deposit $20,000 in saving account that earns 5% annually.The deposit amount is $500 at the end of every three months.