# Future Value Formula

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Importantly The Formula Allows Us To Convert One Lump Sum Payment In The Future To An Equivalent Present Value.

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The Appropriately Determined Interest Rate That Is Used To Find The Present Value Of The Future Sum Is Called The Discount Rate.

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Future Value Suppose You Have A Certain Amount Of Money In A Savings Account.

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Note That The Function Can Be Used For Both Single Sum And Annuity Calculations Depending On The Parameters Supplied.

1 2 1 Fv Annuity Formula The Future Value Of An Annuity With N Periods And An Interest Rate Of I Can Be Found With The Following Formula.

When You Click Ok To Accept The Solution It Will Be Displayed In The Cell You Selected Next To Future Value Your Excel Spreadsheet Should Now Look Like.

Fv Formula.

Some Of You May Be Familiar With The Fv Future Value Formula Provided By Excel We Will However Not Be Using It At This Moment As We Will Be Building The.

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Solve For Number Of Periods On Annuity Fv.

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And Then Drawing Of Interest On The Original Sum Plus The Interest Accumulated In Prior Periods The General Formula For Compounding Is.

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The Formula For Calculating Future Value Is.