Use FV for a fixed-rate, fixed-payment model

Excel’s function is FV(rate, nper, pmt, [pv], [type]). Rate is per payment period, nper counts periods, pmt is the recurring payment, pv is the initial amount and type selects payment timing. Type 0 means period end; type 1 means period beginning. Microsoft documents these arguments in its FV reference.

Deposits are outflows in the function’s financial sign convention, so enter them as negative to obtain a positive future receipt. A blank or zero initial amount means no starting lump sum. Payment amount and rate stay constant in this formula.

Reproduce a lump-sum example

For $1,000 at 5% annually over ten years with no payments, enter:

=FV(5%,10,0,-1000,0)

The result is approximately 1,628.894626777. Format the cell as currency to display $1,628.89; do not round the rate or intermediate growth factors to make the display look tidy. Compare against the lump-sum calculator using annual compounding.

Convert periods explicitly

For a 12% nominal annual rate compounded monthly, twelve $100 end-month deposits with no starting balance use:

=FV(12%/12,12,-100,0,0)

This returns approximately $1,268.25. Changing the last argument to 1 gives $1,280.93. The difference reflects one additional monthly growth period for every deposit.

A 12% effective annual return needs a different monthly rate: (1+12%)^(1/12)-1. Dividing an effective annual rate by 12 does not preserve its one-year growth factor.

Build an editable retirement scenario

Put current balance in B2, monthly contribution in B3, nominal annual rate in B4, current age in B5 and target age in B6. For monthly compounding and end-month deposits:

=FV(B4/12,(B6-B5)*12,-B3,-B2,0)

B4 must contain a percentage, such as 5%. If B4 contains the number 5 instead, the calculation uses an entirely different rate. Reject a target age below current age instead of allowing a negative planning horizon without explanation.

With a $1,000 starting balance, twelve $100 deposits and a 0% rate, the result is $2,200. This is a useful independent check: when growth vanishes, only the starting balance and payments should remain.

Know when a row-by-row schedule is necessary

A single FV formula cannot directly represent arbitrary deposit increases, changing rates, fees assessed at different dates or an account that stops withdrawals at depletion. A spreadsheet schedule can model those events, but the row order becomes part of the financial assumption.

For end-period deposits, a row can grow the opening balance, subtract the appropriate balance fee, then add the deposit. Beginning-period deposits enter before growth. Keep deposits and gross growth in different columns so the ending balance can be reconciled.

Compare results with identical assumptions

Use the contributions tool or retirement projection with matching rates and payment conventions. If the figures differ, compare period count, type, sign and fee assumptions before assuming one calculation is wrong. The website includes no downloadable workbook; the formulas above are ready to paste into your own sheet.

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