What’s the formula to calculate the monthly or lump-sum investment amount for a desired future value?

How do you calculate the future value of monthly investments?

The future value formula is FV=PV(1+i)ⁿ, where the present value PV increases for each period into the future by a factor of 1 + i.



Calculator Use

1. The present value sum.
2. Number of time periods, typically years.
3. Interest rate.
4. Compounding frequency.
5. Cash flow payments.
6. Growing annuities and perpetuities.

What is the formula future value of a lump sum?

Fn = P(1+i)ⁿ



The term (1+i)ⁿ is known as the compound value factor of lump-sum 1. It is always greater than 1 for positive i which means that CVF goes up with increasing i and n.

How do you calculate lump sum investments?

You must use the mathematical formula: FV = PV(1+r)^n FV = Future Value PV = Present Value r = Rate of interest n = Number of years For example, you have invested a lump sum amount of Rs 1,00,000 in a mutual fund scheme for 20 years. You have the expected rate of return of 10% on the investment.

What is the formula to calculate the present value of a future amount?

P = A/(1+(r/t))nt



In short, a more rapid rate of interest compounding results in a lower present value for any future payment.

How do you calculate present value of future value and interest rate?

How to Calculate Interest Rate Using Present & Future Value

1. Divide the future value by the present value. …
2. Divide 1 by the number of periods you will leave the money invested. …
3. Raise your Step 1 result to the power of your Step 2 result. …
4. Subtract 1 from your result.

What is the formula for present value compounded monthly?

Quote: The present value of the investment is equal to its future value divided by 1 plus I to the N power. Where I is the interest rate per period and n is the number of periods.

How do I calculate the future value of an investment in Excel?

Excel FV Function

1. Summary. …
2. Get the future value of an investment.
3. future value.
4. =FV (rate, nper, pmt, [pv], [type])
5. rate – The interest rate per period. …
6. The future value (FV) function calculates the future value of an investment assuming periodic, constant payments with a constant interest rate.

How do you calculate future value interest factor?

Formula

1. Future Value Interest Factor (FVIF) = (1 + r)ⁿ
2. Future Value = PV * FVIF.
3. Future Value Interest Factor = (1 + 0.08)⁴ = 1.3605.
4. Future Value = $5,000 * 1.3605 = $6,802.44.

How do you calculate future value interest in Excel?

Excel RATE Function

1. Summary. …
2. Get the interest rate per period of an annuity.
3. The interest rate per period.
4. =RATE (nper, pmt, pv, [fv], [type], [guess])
5. nper – The total number of payment periods. …
6. The RATE function returns the interest rate per period of an annuity.

How do you calculate future value compounded monthly in Excel?

A more efficient way of calculating compound interest in Excel is applying the general interest formula: FV = PV(1+r)n, where FV is future value, PV is present value, r is the interest rate per period, and n is the number of compounding periods.