financefv

Purpose

The function returns future value (fv) of the investment based on the constant interest rate.

Syntax

financefv(rate,nper,pmt[,pv][,type])

Arguments

The function requires three numerical arguments:

  1. rate - a rate for the specified period;
    If an annual rate is used, recalculation is necessary, e.g. rate/12.

  2. nper - a total number of annuity payment periods;
    If a period equals 2 years, and if payments are monthly, nper is 2*12=24.

  3. pmt - fixed payment amount for each period;
    Usually, pmt includes principal payment and interest payment, but does not include other taxes and fees.
    If pmt is omitted, 0 is specified, and the pv argument becomes a required argument.

The optional numerical arguments are:

  • pv - a present value at the moment;
    If the argument is omitted, the suggested value is 0, and the pmt argument is required.

  • type - a number, 0 or 1, denoting payment deadline:

    • 0 - payment due in the end of the period;

    • 1 - payment due in the beginning of the period.

Expenditure transactions (present value, payment per period) must be specified with the minus sign, i.e. must be negative values.
Returned Value

The function returns a number, denoting the future value of the investment.

Examples

Example 1. Calculation of future value

Suppose we want to make a deposit commitment for the amount of 1 mln. USD at the rate of 12% for a period of 2 years. The percent will be accrued on a monthly basis. What sum will we get in the end of the deposit period?

We will use the expression financefv(rate,nper,pmt,pv,type), where:

  • rate - a percent rate (rate / 100 / 12 - transform the rate into a fractional value and divide it into a number of months);

  • nper - deposit time (nper*12, in months);

  • pmt - an amount of a monthly payment;

  • pv - the amount of the deposit;

  • type - a type of payment deadline (0).

rate

nper

pmt

pv

type

Result

12

2

0

1 000 000

0

*1 269 734.65

Example 2. The debt on the 30th period of the loan term

Suppose we want to get a loan in the amount of 5 mln. USD at the rate of 22% for 20 years. What sum of the debt will we have on the 30th period of the loan term?

We will use the expression financefv(rate,nper,financepmt(rate,nper,pv),pv), where:

  • rate - a montly percent rate (rate/100/12);

  • nper - a number of period to calculate the remaining debt;

  • financempt - an SRL function, returning the amount of the monthly payment, where:

    • rate - rate/100/12;

    • nper - a loan period*12 (in years);

    • pv - a loan amount;

  • pv - a principal amount of the loan.

rate

loan amount

loan period (years)

debt on the 30th period of the loan term

pmt

22

5 000 000

20

4 953 109.24

-92 853.00