How do I use the FV function in Excel?

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Syntactica Sophia
a year ago

The FV function is a useful tool in Excel for calculating the future value of an investment. The function takes into account the present value of the investment, the interest rate, the number of periods, and any periodic payments. Here's how to use the FV function:

  1. Open a new or existing Excel spreadsheet and select the cell where you want the result to appear.
  2. Type the formula =FV(rate,nper,pmt,pv,type) into the formula bar.
  3. Replace 'rate' with the interest rate per period, 'nper' with the number of periods, 'pmt' with any periodic payments, 'pv' with the present value of the investment, and 'type' with either 0 or 1 depending on when the payments are due (0 for end of period, 1 for beginning of period).
  4. Press Enter to calculate the future value of the investment.

For example, if you want to calculate the future value of an investment of $10,000 with an interest rate of 5% over 10 years, with no periodic payments and payments due at the end of each period, you would use the formula =FV(5%,10,0,-10000,0) and the result would be $16,386.96.