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1.FV Function Excel Template 1

This document contains an example of calculating future value (FV) using the FV function in Excel. It shows how to calculate the future value over 5 years with an initial deposit of $1000 at an interest rate of 10% annually. It also provides the FV formula components and another example calculating the future value of $1000 invested for 7 years at 7% compounded quarterly, resulting in $1,625.41. Additional practice problems are included for calculating future value and number of periods.

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220 views6 pages

1.FV Function Excel Template 1

This document contains an example of calculating future value (FV) using the FV function in Excel. It shows how to calculate the future value over 5 years with an initial deposit of $1000 at an interest rate of 10% annually. It also provides the FV formula components and another example calculating the future value of $1000 invested for 7 years at 7% compounded quarterly, resulting in $1,625.41. Additional practice problems are included for calculating future value and number of periods.

Uploaded by

w_fib
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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FV Function Excel Template

Visit: www.educba.com

Email: [email protected]
INTEREST RATE 10%

YEAR OPENING BALANCE DEPOSIT BALANCE INTEREST RATE CLOSING BALANCE


1 $0.00 $1,000.00 $100.00 $1,100.00
2 $1,100.00 $1,000.00 $210.00 $2,310.00
3 $2,310.00 $1,000.00 $331.00 $3,641.00
4 $3,641.00 $1,000.00 $464.10 $5,105.10
5 $5,105.10 $1,000.00 $610.51 $6,715.61

=FV(B2,5,C5,B5,1) =FV(B2,5,C5,B5,1) $6,715.61

formula text
In this FV in Excel example, if you deposit an amount of $1000.00 for a time period of 5 years at the rate of interest pr
at 10% then the future value that will be received at the end of the 5th year will be calculated in the following manne
Opening Balance = OB
Deposit Balance= DB
Interest Rate = R
Closing Balance= CB
The opening balance at the beginning of the year (1st Year) will be nil that is $0.
Now, let the amount deposited in the account is $1000.00.
So, the interest in 1st year at the 10% will be
(OB + DB) *R
= (0+1000) *0.10 equals to $100.00

The FV formula [FV(rate,nper,pmt,pv,type)] consists of five fields:


Rate is the periodic interest rate.
NPER is total number of payment periods.
Pmt is the amount of payment made in each period. This amount cannot change over the life of the ann
contains principal and interest, but no other fees or taxes.
PV is the present value, or the lump-sum amount that a series of future payments is worth right now.
Type indicates when payments are due. A "0" or data omitted from this field indicates that payments ar
each period. A "1" indicates that payments are made at the beginning of each period.
iod of 5 years at the rate of interest provided
be calculated in the following manner.

ds:

t cannot change over the life of the annuity. Typically, Pmt

future payments is worth right now.


m this field indicates that payments are due at the end of
nning of each period.
Find the ammount accumulated when $1000 is invested for 7 years at 7%
compounded quarterly.
Solution:
Interest rate: 0.07

Compound Periods: 4
Number of years: 7
rate: 0.0175 = Interest rate / compound periods
= Number of years * compound
nper: 28 periods
pmt: 0
pv: 1000
FV(rate,nper,pmt,pv) = ($1,625.41)

sec A:
Hebar wants to invest h
4% ,compounded semi
twice in a year).
Input Output Result write the input value w
Particulars value Fv ? Calculate the Future Va

Sec: B
Hebar wants to have $8
at 4% annual compoun
once in a year).
write the input value w
Calculate the Number o
In this FV in Excel example, find the amount accumulated when $1000 is
invested for 7 years at 7% compounded quarterly.
Interest rate: 0.07
Compound Periods: 4
Number of years: 7
Rate: 0.0175 = Interest rate / compound periods
nper: 28 = Number of years * compound periods
Pmt: 0
Pv: 1000
FV (rate, nper, Pmt, PV) = ($1,625.41)

sec A:
Hebar wants to invest his scholarship money $4000 for 7 years at
4% ,compounded semi annually (that is interest will be calculated
twice in a year).

write the input value with name(particulars) in input section.


Calculate the Future Value.

Sec: B
Hebar wants to have $8000 for his car by investing $1500 today
at 4% annual compounding (that is interest will be calculated
once in a year).
write the input value with name(particulars) in input section.
Calculate the Number of Periods(Nper).

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