Future Value (FV)

[tikchye_oldLearner57]

hello community

can someone kindly explain to me why my FV is in negative form ?

example:

interest rate = 2.60%
No of years = 6
Annual investment = 20000 (fixed amount)

when i used the FV(), my answer is in (128,075.73) - red ?

thanks for the explanation

 

[Bernard Liengme]

All Excel financial function use the same convention: money either flows in
or out; out flow is considered negative. Thus if you use PMT to compute a
loan payment and make the loan amount positive, PMT will be negative because
the loan came in to you while the payments go out from you. The same formula
with a negative pv value (a deposit in an annuity) will give positive
payments (money paid by bank to you).
To get a positive FV in your case make the investment negative (it flows
from you) or simply use =-FV(parms)
best wishes

 

[Michael]

Hi tikchye. If you make your $20,000 annual investment negative (it is an
outflow and should be negative) your Future Value will then be positive. HTH

 

[Bondi]

hello community

can someone kindly explain to me why my FV is in negative form ?

example:

interest rate = 2.60%
No of years = 6
Annual investment = 20000 (fixed amount)

when i used the FV(), my answer is in (128,075.73) - red ?

thanks for the explanation

Hi,

I belive that your payments to the investment should be negative.

From Help:

For all the arguments, cash you pay out, such as deposits to savings,
is represented by negative numbers; cash you receive, such as dividend
checks, is represented by positive numbers.


Regards,
Bondi

 

[tikchye_oldLearner57]

thanks to Michael / Bernard Liengme / Bondi > now I understand

best regards
thanks community