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11. Finance and Business Analytics · Financial Math · 15 min

2. Savings: FV and PV

Lesson 2 of 16
Task 1 of 4
  1. In B6, calculate the balance at the end of the term in B2.

Lesson theory

FV(rate, nper, pmt, [pv]) is the future value: how much a savings account will hold at the end of the term with monthly deposits and compounding interest.

PV(rate, nper, pmt, [fv]) is the present value: how much you must put in today to reach a goal.

Money you pay in is entered as a negative number:

=FV(B1/12,B2,-B3,-B4)

The 4.5% rate is a practice number, not a quote.

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