Spreadsheet Practice

Lesson 26 of 29, Finance

Future & present value

What money grows to, and what future money is worth today.

Pro8 minutes, 2 exercisesFVPV

Watch it done

1 steps

Watch the technique worked out on sample data, then try it yourself in the exercises.

How it works

FV(rate, nper, pmt, [pv]) answers "what will this grow to?" PV(rate, nper, pmt, [fv]) answers "what is that future amount worth today?"

The same sign rule as PMT applies: money you put in is negative. Keep rate and periods in the same units.

Syntax

=FV(B3/12,B4*12,-B2)Monthly saving for 30 years
=PV(B3,B6,0,-B5)Lump sum needed today

Watch out for

  • FV with monthly contributions needs a monthly rate and monthly periods.
  • Leave pmt as 0 when there are no regular payments.

The exercises

  1. Retirement savings. In B8, calculate what the monthly contribution grows to over the years in B4 at the return in B3.
  2. Lump sum today. In B9, calculate how much to invest today to reach the goal in B5 after the years in B6, at the annual return in B3 with no added payments.

Graded practice for this lesson is part of Pro

The walkthrough and notes are open to everyone. Pro unlocks the exercises here and in the other 27 Pro lessons, Excel and Google Sheets, 79 exercises in all.

  1. Retirement savings
  2. Lump sum today
Try these functions in the Formula Lab