calculating the future value of a present value

[Guest]

in Excel, how do you calculate the future value of a present value, given
that you know the interest rate for that period of time. for example, $1
today will be worth how much in 10 years given a 6% interest rate compounded
annually?

 

[JE McGimpsey]

Take a look at the FV function in XL Help:

A1: 1
A2: 6%
A3: 10
A4: =FV(A2,A3,0,-A1) <=== 1.79

Note that PV and FV are of opposite signs - one way to think about it is
that cash flows out to the investment, and flows back in at maturity.

Make sure your units are always the same. For instance, to calculate
monthly compounding:

A5: =FV(A2/12, A3*12, 0, -A1) <=== 1.82

 

[Jason Morin]

One way:

A1: $1
A2: 10 (yrs)
A3: .06 (interest rate)

=A1*(1+A3)^A2

HTH
Jason
Atlanta, GA