Financial analysis
FV function: project future reserve balance from regular deposits
Calculate how an opening reserve plus fixed monthly contributions grows under compound monthly interest, keeping deposit signs consistent.
Opening reserve plus 12 monthly contributions
A cooperative places 500 into an equipment reserve today (B4) and adds 100 at the end of every month (B3) for 12 months (B2) at a 6% annual rate (0.06 in B1, or 0.5% per month).
| Input | Cell | Value |
|---|---|---|
| Annual interest rate | B1 | 0.06 |
| Months (nper) | B2 | 12 |
| Monthly deposit (pmt) | B3 | -100 |
| Opening deposit (pv) | B4 | -500 |
Enter deposits as negative cash outflows
Both the opening deposit (-500) and each monthly deposit (-100) leave your checking account, so both carry negative signs. =ROUND(FV(B1/12, B2, B3, B4), 2) returns +1,764.40—consisting of 1,700.00 contributed principal plus 64.40 interest.
=ROUND(FV(B1/12,B2,B3,B4),2)What happens if signs disagree or rate is 0%
Mixing a negative pmt (-100) with a positive pv (+500) tells FV you borrowed 500 and are paying it down rather than saving on top of it! Set B1 to 0 in the practice grid to check the zero-interest sanity baseline: 500 + 12 * 100 = 1,700.
Assumptions in this example
This example uses a constant nominal annual interest rate divided by 12 and payments at the end of each month. Fees, taxes and changes in rates are excluded. Actual lender or savings terms can differ.
Try the example
Use the original values or change them to test your understanding.