calculating future value of one initial investment

[wendola]

Is there a formula/function in Excel that will calculate the future value of an investment with compound interest

For example, if I invested 1000 now at 8% interest, how much will it be worth it 65 years

Thanks

Wendy

 

[Ron Rosenfeld]

Is there a formula/function in Excel that will calculate the future value of an investment with compound interest?

For example, if I invested 1000 now at 8% interest, how much will it be worth it 65 years?

Thanks.

Wendy

The EXCEL function is FV. In your example: =FV(8%,65,0,-1000)

This is equivalent to the formula =1000*1.08^65



--ron

 

[Ron Rosenfeld]

thanks for the reply. I tried it and it gives me what the value would be if interest was compounded annually. What if interest is compounded monthy, quarterly, or semi-annually?

Thanks so much for all of your help.

wendy

Using the same formulas, you divide the interest by the number of compoundings
per year; and multiply the number of years by the same factor.

For example, for quarterly compounding: =1000*(1 + (.08/4))^(65*4)

You can do the same thing with the appropriate factors in the FV function/


--ron