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Excel FV Function Examples

In the spreadsheets below, the Excel FV function is used to calculate the future value of two different investments.

Example 1

In the following spreadsheet, the Excel Fv function is used to calculate the future value of an investment of $1,000 per month for a period of 5 years. The present value is 0, the interest rate is 5% per year and the payments are made at the end of each month.

Formulas:   A 1 Future value of an investment of $1,000 per month over 5 years, with a present value of $0, and an interest rate of 5% per year (payment made at end of each mth): 2 =FV( 5%/12, 60, -1000 )

Results:   A 1 Future value of an investment of $1,000 per month over 5 years, with a present value of $0, and an interest rate of 5% per year (payment made at end of each mth): 2 $68,006.08

Excel Fvschedule Function Example

In cell B1 of the spreadsheet below, the Excel Fvschedule function is used to calculate the future value of an investment of $10,000, over 5 years. The investment earns interest of 5% during the first two years and 3.5% during the 3rd, 4th and 5th years.

Formula:   A B 1 5.0% =FVSCHEDULE( 10000, A1:A5 ) 2 5.0%   3 3.5%   4 3.5%   5 3.5%

Result:   A B 1 5.0% $12,223.61 2 5.0%   3 3.5%   4 3.5%   5 3.5%

NPV( rate, value1, [value2], [value3], ... )

NPV Function Example

Example 1

	A	B
1	2%	- Annual discount rate
2	-5000	- Initial investment cost after 1 year
3	800	- Return from year 1
4	950	- Return from year 2
5	1080	- Return from year 3
6	1220	- Return from year 4
7	1500	- Return from year 5
8
9		Net Present Value:
10		=NPV( A1, A2:A7 )

The spreadsheet on the right shows an example of the NPV function.

The rate and value arguments that are supplied to the function are shown in cells A1 - A7 of the spreadsheet and the NPV function is shown in cell B10.

This function gives the result 196.88.

Note that, in this example, the initial investment of $5,000 (shown in cell A2), is made at the end of the first period. Therefore, this value is included as the first value1 argument to the NPV function.

NPV Function Example 2

	A	B
1	5%	- Annual discount rate
2	-10000	- Initial investment cost at start of period 1
3	2000	- Return from year 1
4	2400	- Return from year 2
5	2900	- Return from year 3
6	3500	- Return from year 4
7	4100	- Return from year 5
8
9		Net Present Value:
10		=NPV( A1, A3:A7 ) + A2

The spreadsheet on the right shows an example of the NPV function in which the first payment is made at the start of the first period.

Again, the rate and value arguments of the investment are shown in cells A1 - A7 of the spreadsheet and the NPV function is shown in cell B10.

This function gives the result 2,678.68.

Note that, as the initial investment of $10,000 (shown in cell A2), is made at the start of the first period, this value is not included in the arguments to the NPV function. Instead it is added on afterwards.