FYBAF SEM I,VOCATIONAL SKILLS IN ACCOUNTING AND FINANCE PEPER I FUTURE VALUE ILLUSTRATION 1 NEP 2020

Описание: PART 1    • FYBAF SEM I, NEP 2020, VOCATIONAL SKILLS I...  

"Hey everyone, and welcome back to the channel! Today, we're diving into one of the most useful financial functions in Excel: the FV function, which stands for Future Value."
What Does FV Do?
"In simple terms, the FV function calculates the future value of an investment based on a series of equal, periodic payments and a constant interest rate. It answers the question: If I save or invest X amount every month for Y years, how much money will I have at the end?"

The FV Syntax: Key Arguments
"The FV function uses five main inputs, but only the first three are absolutely essential. The basic syntax is:
=FV(rate, nper, pmt, [pv], [type])
rate (Required): This is the interest rate per period. Remember to adjust annual rates! If you have a 5% annual rate and make monthly payments, you must use 5%/12.
nper (Required): The total number of payment periods. If you're saving for 5 years with monthly payments, you'd use 5 * 12, or 60.
pmt (Required): The payment made each period. This is typically a negative number because it represents money leaving your pocket. For example, a $100 monthly contribution would be entered as -100.
Optional Arguments (For Advanced Use)
[pv] (Optional): This is the Present Value, or the lump-sum amount you already have today. If you start with $1,000 in your account, this would be entered as -1000. If you don't include it, Excel assumes it's zero.
[type] (Optional): Specifies when payments are due:
0 (or omitted): Payment is due at the end of the period (most common).
1: Payment is due at the beginning of the period.