Hello:
When I use the function wizard in Excel 2007, the wizard returns the correct amount, but the result comes back with a minus sign. I can't understand the rationale of the Excel algorithm here. What is the most logical way to remedy this issue?
Thanks.
Richard
The simplest Future Value computation might be
This says that a payment of $100 at time 0 is worth $110 at time 1, at 10% each period.
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In other words, if you give the bank $100, you are satisfied if they give you back $110 after 1 year at 10% interest.
The Excel functions use this same sign convention. If payments are considered negative (going out) then the future value is considered positive (coming in).
If you have listed payments as positive, the Future Value will be negative.
You can negate the result if you like to think of it as positive, regardless.
Take care about using the right signs for other quantities, like down payments.
FrankBoston is the pen name for Andrew Garland, Lexington MA
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