Microsoft Office Tutorials and References
In Depth Information
The EFFECT function is found only if the Analysis Toolpak is installed. It must be turned on
using the Add-Ins command from the Tools menu.
The nominal interest rate.
The number of compounding periods per year.
For example: =EFFECT(6.25%,4) returns the result 6.40%.
FV FV returns the future value of periodic constant payments and a constant interest rate.
The FV function is used primarily for finding the payments over a period of time to reach a
specific goal or lump sum. As you should notice in Figure 6.17, the deposit amount or present
value is $1,000, the interest earned is 7%, and the you plan on depositing $200 per month over
the period of the annuity of 12 months at the beginning of each period. The value or worth at
the end of the annuity is $3,599.
The interest rate per period.
The number of payment periods in an annuity.
The payment made per period. Typically containing principal and
interest and does not change over the life of the loan.
The present value that a series of payments is worth right now. If
omitted, Excel assumes zero.
The timing of the payment. When the payments are due.
Figure 6.17
FV returns the future
value of periodic
payments and a
constant interest rate.
The FV
function built with
cell referencing
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