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Future Value (FV)

  1. #1
    tikchye_oldLearner57
    Guest

    Future Value (FV)

    hello community

    can someone kindly explain to me why my FV is in negative form ?

    example:

    interest rate = 2.60%
    No of years = 6
    Annual investment = 20000 (fixed amount)

    when i used the FV(), my answer is in (128,075.73) - red ?

    thanks for the explanation
    --
    oldLearner57

  2. #2
    Michael
    Guest

    RE: Future Value (FV)

    Hi tikchye. If you make your $20,000 annual investment negative (it is an
    outflow and should be negative) your Future Value will then be positive. HTH
    --
    Sincerely, Michael Colvin


    "tikchye_oldLearner57" wrote:

    > hello community
    >
    > can someone kindly explain to me why my FV is in negative form ?
    >
    > example:
    >
    > interest rate = 2.60%
    > No of years = 6
    > Annual investment = 20000 (fixed amount)
    >
    > when i used the FV(), my answer is in (128,075.73) - red ?
    >
    > thanks for the explanation
    > --
    > oldLearner57


  3. #3
    Bernard Liengme
    Guest

    Re: Future Value (FV)

    All Excel financial function use the same convention: money either flows in
    or out; out flow is considered negative. Thus if you use PMT to compute a
    loan payment and make the loan amount positive, PMT will be negative because
    the loan came in to you while the payments go out from you. The same formula
    with a negative pv value (a deposit in an annuity) will give positive
    payments (money paid by bank to you).
    To get a positive FV in your case make the investment negative (it flows
    from you) or simply use =-FV(parms)
    best wishes
    --
    Bernard V Liengme
    www.stfx.ca/people/bliengme
    remove caps from email

    "tikchye_oldLearner57" <tikchyeoldLearner57@discussions.microsoft.com> wrote
    in message news:21FE906D-1EC6-4491-BB1A-11BB0682D345@microsoft.com...
    > hello community
    >
    > can someone kindly explain to me why my FV is in negative form ?
    >
    > example:
    >
    > interest rate = 2.60%
    > No of years = 6
    > Annual investment = 20000 (fixed amount)
    >
    > when i used the FV(), my answer is in (128,075.73) - red ?
    >
    > thanks for the explanation
    > --
    > oldLearner57




  4. #4
    Bondi
    Guest

    Re: Future Value (FV)


    tikchye_oldLearner57 wrote:
    > hello community
    >
    > can someone kindly explain to me why my FV is in negative form ?
    >
    > example:
    >
    > interest rate = 2.60%
    > No of years = 6
    > Annual investment = 20000 (fixed amount)
    >
    > when i used the FV(), my answer is in (128,075.73) - red ?
    >
    > thanks for the explanation
    > --
    > oldLearner57


    Hi,

    I belive that your payments to the investment should be negative.

    >From Help:

    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.


    Regards,
    Bondi


  5. #5
    tikchye_oldLearner57
    Guest

    Re: Future Value (FV)

    thanks to Michael / Bernard Liengme / Bondi > now I understand

    best regards
    thanks community
    --
    oldLearner57


    "Bondi" wrote:

    >
    > tikchye_oldLearner57 wrote:
    > > hello community
    > >
    > > can someone kindly explain to me why my FV is in negative form ?
    > >
    > > example:
    > >
    > > interest rate = 2.60%
    > > No of years = 6
    > > Annual investment = 20000 (fixed amount)
    > >
    > > when i used the FV(), my answer is in (128,075.73) - red ?
    > >
    > > thanks for the explanation
    > > --
    > > oldLearner57

    >
    > Hi,
    >
    > I belive that your payments to the investment should be negative.
    >
    > >From Help:

    > 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.
    >
    >
    > Regards,
    > Bondi
    >
    >


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