Forecasting Future Values With Microsoft Excel
Making future value calculations, such as for investment analysis or retirement planning? Microsoft Excel can help. Excel’s FV, or future value, function lets you easily calculate how an initial investment or regular payment grows over time because of compound interest.
The FV function calculates the future value of a loan or investment given its interest rate, the term (or number of payments), the payment, the present value (or loan balance), and, optionally, the type-of-annuity switch. If you set the type-of-annuity switch to 1, Excel assumes payments occur at the beginning of the period, following the annuity due convention. If you set the annuity switch to 0 or you omit the argument, Excel assumes payments occur at the end of the period following the ordinary annuity convention.
Calculating Present Values With Microsoft Excel
Making present value calculations, such as for loan analysis or investment planning? Microsoft Excel can help. Excel’s PV, or present value, function lets you easily calculate the present, current day, value of a future cash flow or of a regular payment stream.
The PV function calculates the present value of an annuity, or future value, given the periodic rate, number of periods, payment, future value (or balloon payment), and, optionally,the type-of-annuity switch.