To calculate the future value of an investment using the FV function in Google Sheets, follow these steps:
- Open Google Sheets and create a new worksheet.
- In a cell where you want the future value result to be displayed, enter the following formula:
=FV(rate, nper, pmt, [pv], [type])
Here, the parameters are:
- rate: The interest rate per period.
- nper: The total number of investment periods.
- pmt: The payment amount made each period.
- [pv] (optional): The present value, or the initial investment.
- [type] (optional): Indicates whether the payment is made at the beginning or end of the period. Use 0 for end of the period or 1 for the beginning.
- Replace the values in the formula with your specific data. For example, if the interest rate is 5% (0.05), the investment has a duration of 10 years, you make monthly payments of $100, and the initial investment is $5000, the formula would look like this:
=FV(0.05/12, 10*12, -100, -5000)
Note that the interest rate is divided by 12 since it is expressed in annual terms and the payments are made monthly.
- Press Enter to calculate the future value of the investment based on the provided data.
The cell will display the future value of the investment based on the provided parameters.