Hi Nemo!
You'll find the formula used for PV, FV, PMT, NPER and RATE in Help
for the PV function.
For FV that formula re-expresses as:
=-(PV*(1+RATE)^NPER+PMT*(1+RATE*TYPE)*((1+RATE)^NPER-1)/RATE)
I suspect the trouble that you are having is with the concept of
signing and interpreting the monetary amounts or use of the correct
interest rate. Adopt a persona (such as borrower or lender). Then sign
money paid out or obligations / rights given up as negative. And sign
money received or rights to receive as positive. The return of the
function is signed similarly.
Example:
How much will deposits of $1500 at the end of each period accumulate
to after 10 periods at 6% effective per period:
Adopt persona of investor:
PV = 0
PMT = -1500
RATE = 6%
NPER = 10
TYPE = 1
=FV(6%,10,-1500,0,0)
Returns: 20957.4639583856
Using the formula above:
=-(0*(1+6%)^10+-1500*(1+6%*1)*((1+6%)^10-1)/6%)
Returns: 20957.4639583856
As far as the interest rate is concerned, the rate used must be the
effective rate per period of time counted by NPER and any PMTs must be
made at that same frequency.
--
Regards
Norman Harker MVP (Excel)
Sydney, Australia
(e-mail address removed)
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See:
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