Spreadsheets make your managing money more accessible and more straightforward. Numerous intelligent features available in Google sheets maybe utilized rapidly and simply determine valuable financial values.
The future value formula in Google sheets is the best function that enables you to determine the future value of your investments.
The future value of your assets for recurring payments with fixed interest rates may be calculated using the FV formula.
What is the formula for calculating future value?
=FV(rate, number_of_periods, payment_amount, [present_value], [end_or_beginning])
● Rate: The interest rate that accrues at a constant rate. They are always annual. If you wish to figure out the interest rate for more regular payments (quarterly or monthly), divide the rate appropriately.
● Several periods: The number of payments you intend to make over time.
● Payment amount: The consistent payment you make each period.
It will be the payment frequency (weekly (52), monthly (12), or quarterly (4) times the duration, i.e. monthly payment over three years): 36 periods are obtained by multiplying 12 by 3.
What is NPV function?
NPV is similar to the PV function (present value). The primary difference between PV and NPV is that PV allows cash flows to begin either at the end or at the beginning of the period. Unlike the variable NPV cash flow values, PV cash flows must be constant throughout the investment.
Copy the example data in the following table, and paste it in cell A1 of a new Excel worksheet. For formulas to show results, select them, press F2, and then press Enter. If you need to, you can adjust the column widths to see all the data.
|0.1||Annual discount rate|
|-10000||Initial cost of investment one year from today|
|3000||Return from first year|
|4200||Return from second year|
|6800||Return from third year|
|=NPV(A2, A3, A4, A5, A6)||Net present value of this investment||$1,188.44|
|0.08||Annual discount rate. This might represent the rate of inflation or the interest rate of a competing investment.|
|-40000||Initial cost of investment|
|8000||Return from first year|
|9200||Return from second year|
|10000||Return from third year|
|12000||Return from fourth year|
|14500||Return from fifth year|
|=NPV(A2, A4:A8)+A3||Net present value of this investment||$1,922.06|
|=NPV(A2, A4:A8, -9000)+A3||Net present value of this investment, with a loss in the sixth year of 9000||($3,749.47)|