FV function

FV, one of the financial functions, calculates the future value of an investment based on a
constant interest rate. You can use FV with either periodic, constant payments, or a single lump
sum payment.
Syntax
FV (rate,nper,pmt,[pv],[type])
For a more complete description of the arguments in FV and for more information on annuity
functions, see PV.
The FV function syntax has the following arguments:
 Rate Required. The interest rate per period.
 Nper Required. The total number of payment periods in an annuity.
 Pmt Required. The payment made each period; it cannot change over the life of the
annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is
omitted, you must include the pv argument.
 Pv Optional. 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 Optional. The number 0 or 1 and indicates when payments are due. If type is
omitted, it is assumed to be 0.

Set type equal to If payments are due

0 At the end of the period

1 At the beginning of the period

Remarks
 Make sure that you are consistent about the units you use for specifying rate and nper. If
you make monthly payments on a four-year loan at 12 percent annual interest, use
12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use
12% for rate and 4 for nper.
 For all the arguments, cash you pay out, such as deposits to savings, is represented by
negative numbers; cash you receive, such as dividend checks, is represented by positive
numbers.
Examples
 Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet.
For formulas to show results, select them, press F2, and then press Enter. If you need to, you can
adjust the column widths to see all the data.

Data Description

0.06 Annual interest rate

10 Number of payments

-200 Amount of the payment

-500 Present value

1 Payment is due at the beginning of the period (0 indicates payment is due

at end of period)

Formula Description Result

=FV(A2/12, A3, A4, A5, Future value of an investment using the terms in A2:A5. $2,581.40
A6)

Example 2

Data Description

0.12 Annual interest rate

12 Number of payments

-1000 Amount of the payment

Formula Description Result

=FV(A2/12, A3, A4) Future value of an investment using the terms in A2:A4. $12,682.50

Data Description

0.11 Annual interest rate

35 Number of payments

-2000 Amount of the payment

1 Payment is due at the beginning of the year (0 indicates end of year)

Formula Description Result

=FV(A2/12, A3, A4,, A5) Future value of an investment with the terms in cells A2:A4 $82,846.25

Example 3
Example 4

Data Description

0.06 Annual interest rate

12 Number of payments

-100 Amount of the payment

-1000 Present value

1 Payment is due at the beginning of the year (0 indicates end of year)

Formula Description Result

=FV(A2/12, A3, A4, A5, A6) Future value of an investment using the terms in A2:A5. $2,301.40

PV function
PV, one of the financial functions, calculates the present value of a loan or an investment, based
on a constant interest rate. You can use PV with either periodic, constant payments (such as a
mortgage or other loan), or a future value that's your investment goal.
Syntax
PV(rate, nper, pmt, [fv], [type])
The PV function syntax has the following arguments:
 Rate Required. The interest rate per period. For example, if you obtain an automobile
loan at a 10 percent annual interest rate and make monthly payments, your interest rate
per month is 10%/12, or 0.83%. You would enter 10%/12, or 0.83%, or 0.0083, into the
formula as the rate.
 Nper Required. The total number of payment periods in an annuity. For example, if you
get a four-year car loan and make monthly payments, your loan has 4*12 (or 48) periods.
You would enter 48 into the formula for nper.
  Pmt Required. The payment made each period and cannot change over the life of the
annuity. Typically, pmt includes principal and interest but no other fees or taxes. For
example, the monthly payments on a $10,000, four-year car loan at 12 percent are
$263.33. You would enter -263.33 into the formula as the pmt. If pmt is omitted, you
must include the fv argument.
 Fv Optional. The future value or a cash balance you want to attain after the last
payment is made. If fv is omitted, it is assumed to be 0 (the future value of a loan, for
example, is 0). For example, if you want to save $50,000 to pay for a special project in 18
years, then $50,000 is the future value. You could then make a conservative guess at an
interest rate and determine how much you must save each month. If fv is omitted, you
must include the pmt argument.
 Type Optional. The number 0 or 1 and indicates when payments are due.

Set type equal to If payments are due

0 or omitted At the end of the period

1 At the beginning of the period

Example
Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet.
For formulas to show results, select them, press F2, and then press Enter. If you need to, you can
adjust the column widths to see all the data.

Data Description

$500.00 Money paid out of an insurance annuity at the end of every month.

8% Interest rate earned on the money paid out.

20 Years the money will be paid out.

Formula Description Result

=PV(A3/12, 12*A4, A2, , 0) Present value of an annuity with the terms in A2:A4. ($59,777.15)

CUMPRINC function
Returns the cumulative principal paid on a loan between start_period and end_period.
Syntax
CUMPRINC(rate, nper, pv, start_period, end_period, type)
 The CUMPRINC function syntax has the following arguments:
 Rate Required. The interest rate.
 Nper Required. The total number of payment periods.
 Pv Required. The present value.
 Start_period Required. The first period in the calculation. Payment periods are
numbered beginning with 1.
 End_period Required. The last period in the calculation.
 Type Required. The timing of the payment.

Type Timing

0 (zero) Payment at the end of the period

1 Payment at the beginning of the period

Remarks
 Make sure that you are consistent about the units you use for specifying rate and nper. If
you make monthly payments on a four-year loan at an annual interest rate of 12 percent,
use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan,
use 12% for rate and 4 for nper.
 If rate ≤ 0, nper ≤ 0, or pv ≤ 0, CUMPRINC returns the #NUM! error value.
 If start_period < 1, end_period < 1, or start_period > end_period, CUMPRINC returns the
#NUM! error value.
 If type is any number other than 0 or 1, CUMPRINC returns the #NUM! error value.
Example
Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet.
For formulas to show results, select them, press F2, and then press Enter. If you need to, you can
adjust the column widths to see all the data.

Data Description

0.09 Interest rate per annum

30 Term in years
Data Description

125000 Present value

Formula Description Result

=CUMPRINC(A2/12,A3*12,A4,13,24,0 The total principal paid in the second year of -

) payments, periods 13 through 24 934.1071234

=CUMPRINC(A2/12,A3*12,A4,1,1,0) The principal paid in a single payment in the first -

month (-68.27827) 68.27827118

Notes:
 You divide the interest rate by 12 to get a monthly rate, and you multiply the years the
money is paid out by 12 to get the number of payments.
 In Excel Web App, to view the result in its proper format, select the cell, and then on the
Home tab, in the Number group, click the arrow next to Number Format, and click
General.

Standard Deviation and Correlation

To calculate standard deviation and correlation in Excel, you can use the following functions:
 Standard deviation
To calculate standard deviation, you can use the STDEV.S or STDEV.P function:
 STDEV.S: Calculates the standard deviation for a sample, which is a subset of the
population. This function divides by the number of data points minus one (n-1) to
account for sample variability.
 STDEV.P: Calculates the standard deviation for an entire population. This
function divides by the total number of data points.
 Correlation
To calculate correlation, you can use the Correlation function:
o Download the data into Excel and arrange it into columns.
o Click Data > Data Analysis > Correlation.
o Enter the input range that contains the data.
o Select Grouped By: Columns.
Here's how to calculate standard deviation in Excel:
 1. Enter your data into a column of cells.
2. Select an empty cell for the result.
3. Type =STDEV.S() or =STDEV.P().
4. Select the data range.
5. Press Enter.
Standard deviation is a measure of how much a value deviates from the average. A higher
standard deviation indicates that the distribution is more spread out and uneven. Correlation is a
measure of the variation between two variables. It can be used to analyze the risk of an
investment.