Formula Guide

The Excel FV Function
explained simply

FV calculates the future value of an investment based on a constant interest rate and regular payments — the basis of savings and retirement projections.

ExcelPro · 5 min read · Updated June 2026
Contents
  1. What does FV do?
  2. Syntax
  3. 4 examples
  4. Common mistakes
  5. FAQ

What does FV do?

FV calculates what a series of regular payments (or a lump sum) will grow to by a future date, given a constant interest rate.

It is the standard formula behind savings goal projections, retirement planning, and any "if I save $X per month at Y% for Z years" question.

Syntax

=FV(rate, nper, pmt, [pv], [type])
ArgumentDescription
rate requiredThe interest rate per period.
nper requiredThe total number of payment periods.
pmt requiredThe payment made each period. Entered as negative since it represents money leaving your hand.
pv optionalThe present value or lump sum already invested. Defaults to 0.
type optional0 = payments at end of period (default), 1 = payments at start.
⚠️ Payments and lump sums use negative numbers

FV treats money leaving you (deposits, payments) as negative and money you receive (the result) as positive — entering pmt as positive will throw off the sign of the result.

Examples

Example 1
Monthly savings plan
=FV(0.05/12,36,-200)

Saving $200/month for 36 months at 5% annual interest (divided by 12 for monthly) grows to about $7,750.67.

Example 2
Lump sum plus regular contributions
=FV(0.05/12,36,-200,-1000)

Same plan, but starting with an additional $1,000 already invested.

Example 3
Annual contributions instead of monthly
=FV(0.06,10,-5000)

Saving $5,000/year for 10 years at 6% annual interest.

Example 4
Payments at the start of each period
=FV(0.05/12,36,-200,0,1)

Same monthly plan, but assuming deposits happen at the start of each month rather than the end — results in a slightly higher total.

Common mistakes

⚠️ Forgetting to divide an annual rate by 12 for monthly payments

If pmt is monthly, rate must also be a monthly rate — divide the annual rate by 12.

⚠️ Entering pmt as a positive number

This flips the sign of the whole result and can confuse interpretation — always enter outgoing payments as negative.

FAQ

Does FV account for taxes or inflation?
No — it is a pure compound-interest calculation. Real-world projections often need additional adjustments for tax and inflation.

Practise FV with real data

ExcelPro has hands-on FV exercises built into real job scenarios — free to start.

Try FV exercises →

Related formulas

PMT RATE NPER