Which of the following are the four variables in present value annuity problems?

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FV, one of the financial functions, calculates the future value of an investment based on a constant interest rate. You can use FV with either periodic, constant payments, or a single lump sum payment.

Use the Excel Formula Coach to find the future value of a series of payments. At the same time, you'll learn how to use the FV function in a formula.

Or, use the Excel Formula Coach to find the future value of a single, lump sum payment.

Syntax

FV(rate,nper,pmt,[pv],[type])

For a more complete description of the arguments in FV and for more information on annuity functions, see PV.

The FV function syntax has the following arguments:

  • Rate    Required. The interest rate per period.

  • Nper    Required. The total number of payment periods in an annuity.

  • Pmt    Required. The payment made each period; it cannot change over the life of the annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you must include the pv argument.

  • Pv    Optional. The present value, or the lump-sum amount that a series of future payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt argument.

  • Type    Optional. The number 0 or 1 and indicates when payments are due. If type is omitted, it is assumed to be 0.

Set type equal to

If payments are due

0

At the end of the period

1

At the beginning of the period

Remarks

  • Make sure that you are consistent about the units you use for specifying rate and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, use 12% for rate and 4 for nper.

  • 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.

Examples

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.

Data

Description

0.06

Annual interest rate

10

Number of payments

-200

Amount of the payment

-500

Present value

1

Payment is due at the beginning of the period (0 indicates payment is due at end of period)

Formula

Description

Result

=FV(A2/12, A3, A4, A5, A6)

Future value of an investment using the terms in A2:A5.

$2,581.40

Example 2

Data

Description

0.12

Annual interest rate

12

Number of payments

-1000

Amount of the payment

Formula

Description

Result

=FV(A2/12, A3, A4)

Future value of an investment using the terms in A2:A4.

$12,682.50

Example 3

Data

Description

0.11

Annual interest rate

35

Number of payments

-2000

Amount of the payment

1

Payment is due at the beginning of the year (0 indicates end of year)

Formula

Description

Result

=FV(A2/12, A3, A4,, A5)

Future value of an investment with the terms in cells A2:A4

$82,846.25

Example 4

Data

Description

0.06

Annual interest rate

12

Number of payments

-100

Amount of the payment

-1000

Present value

1

Payment is due at the beginning of the year (0 indicates end of year)

Formula

Description

Result

=FV(A2/12, A3, A4, A5, A6)

Future value of an investment using the terms in A2:A5.

$2,301.40

Need more help?

Which of the following are the four variables in present value annuity problems multiple select question?

The four variables are present value (PV), time as stated as the number of periods (n), interest rate (r), and future value (FV).

What are the five variables used in basic TVM?

There are Always Five Variables Every time value of money problem has five variables: Present value (PV), future value (FV), number of periods (N), interest rate (i), and a payment amount (PMT).

What is the present value of an annuity?

The present value of an annuity refers to how much money would be needed today to fund a series of future annuity payments. Because of the time value of money, a sum of money received today is worth more than the same sum at a future date.

What factors must be known in order to calculate the current value of an annuity?

What factors must be known in order to calculate the current value of an annuity? -number of periods -amount of each annuity payment -interest rate.

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