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FV

The FV function in Google Sheets is a powerful tool used to calculate the future value of an annuity investment. It takes into account constant-amount periodic payments and a constant interest rate. This comprehensive guide will help you understand and master the application of the FV function.

Function Syntax and Parameters

Syntax: FV(rate, number_of_periods, payment_amount, [present_value], [end_or_beginning])

Parameters:

  • rate: The interest rate per period.
  • number_of_periods: The total number of payment periods.
  • payment_amount: The payment made each period.
  • present_value: [Optional] The present value, or the lump sum amount to invest.
  • end_or_beginning: [Optional] Indicates whether payments are made at the end or beginning of the period.

Step-by-Step Tutorial

  1. Calculating future value with known parameters:

    • Example: =FV(0.05, 10, -500)
    • Result: The future value based on an interest rate of 5%, 10 periods, and a payment of $500 will be calculated.

  2. Considering additional parameters:

    • Example: =FV(0.05, 10, -500, -2000)
    • Result: The future value calculation will include a present value of $2000.

Use Cases and Scenarios

  1. Retirement Planning: Determine the future value of regular contributions towards retirement savings.
  2. Investment Analysis: Calculate the future value of an investment with fixed returns and periodic contributions.
  3. Loan Planning: Calculate the amount of money a borrower will owe at the end of the loan term.

Related Functions

  • PV: Calculates the present value of an investment or loan.
  • RATE: Calculates the interest rate per period for an annuity.

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