6th December 2019

financeformulas
11

What is the formula for present value?

Present Value (PV) is a formula used in Finance that calculates the present day value of an amount that is received at a future date. Time value of money is the concept that receiving something today is worth more than receiving the same item at a future date.

Regarding this, what is the future value of your money?

Future value is the value of an asset at a specific date. It measures the nominal future sum of money that a given sum of money is "worth" at a specified time in the future assuming a certain interest rate, or more generally, rate of return; it is the present value multiplied by the accumulation function.

Is there a formula for compound interest?

Let's look at an example. If an amount of $5,000 is deposited into a savings account at an annual interest rate of 5%, compounded monthly, the value of the investment after 10 years can be calculated as follows P = 5000. r = 5/100 = 0.05 (decimal).

How do you calculate future value in Excel?

Excel FV Function
  1. rate - The interest rate per period.
  2. nper - The total number of payment periods.
  3. pmt - The payment made each period. Must be entered as a negative number.
  4. pv - [optional] The present value of future payments. If omitted, assumed to be zero.
  5. type - [optional] When payments are due.
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