Excel Formula Coach
FV function, scenario #2: Use it to find the future value of a lump sum
Calculates the future value for a lump sum investment, assuming a constant interest rate.
For example, you've invested $10,000 in a money market fund. You expect an average return of 2%, with interest paid monthly. The investment's future value after 5 years will be $11,050.79.
Syntax FV(rate, nper, , pv, [type])
Tip Wondering why there's no pmt argument in the example above? That's because this is a lump sum, and you won't be making payments. This means you skip adding a value for pmt. But you do need to include a comma in its place so Excel knows you've deliberately left pmt out.
Why is [type] in square brackets? The brackets mean it's optional. If you skip this argument, 0 is assumed, which means interest is paid at the end of each period.
Example =FV(2%/12,5*12, , 10000)
The FV function has the following arguments when you use FV for a lump sum: Rate, Nper, and Pv are required. Enter a comma in place of the pmt argument before pv.
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