Chapter 4. USING FINANCIAL FUNCTIONS

Calculate Future Value

If you have $1,000 and you plan to invest it at 10 percent interest, compounded annually for ten years, the amount you will receive at the end of ten years is called the future value (FV) of $1,000. You can use Excel's FV function to calculate the amount you will receive.

An annuity is a series of payments where each payment is the same amount, the period between payments is the same, the interest rate for each period is constant, and the interest is compounded. If you deposit $1,000 per year for five years and receive 10 percent interest, compounded annually, the amount you receive at the end of five years is the future value of an annuity. You can also use Excel's FV function to compute ...

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