FV Function Explained
The FV() function in Microsoft Excel calculates the future value of an investment based on a constant interest rate. It takes three arguments: rate, nper, and pmt. Rate is the interest rate per period, nper is the total number of payment periods, and pmt is the payment made each period. The function returns the future value of the investment, which is the total amount that will be received after all the payments have been made.
FV Function Syntax
FV(rate, nper, pmt, [pv], [type])
- rate: The interest rate per period.
- nper: The total number of payment periods.
- pmt: The payment made each period; it cannot change over the life of the annuity.
- pv: (Optional) The present value, or the lump-sum amount that a series of future payments is worth right now. If omitted, it is assumed to be 0 (the future value of a loan, for example, when the borrower has no outstanding balance).
- type: (Optional) A number 0 or 1 and indicates when payments are due. 0 or omitted = end of the period. 1 = beginning of period.