# FV function

S

#### Struggling College Student

I have to make a plan for a monthly payment deposit for the next 15 years.
The account pays 4.5% annual interest, compounded monthly. I have to use the
FV function to determine the % of college tuition saved.

Out of State Annual Tuition=40000
Rate(per month)=4.5%/12
Nper(number of monthly payments)=15*12
Pmt(payment per period)=375
Percentage of Tuition Saved=FV/Tuition for 4 years

For the Future Value, I used =-FV(0%/12,180,375), which gave me a return of
69,423.38. Am I going in the right direction?

J

#### JoeU2004

"Struggling College Student"
I have to make a plan for a monthly payment deposit for the next 15 years.
The account pays 4.5% annual interest, compounded monthly. I have to
use the FV function to determine the % of college tuition saved.

I think you want (in A1):

=fv(4.5%/12, 15*12, -375)

which translates into depositing 375 per month into a savings account that
earns annual interest of 4.5% compounded monthly.

Right? If I misunderstood the financial arrangement, please clarify.

As for percent of tuition saved:

=A1 / (40000 * 4)

formatted as Percentage.

PS: When using Excel financial functions like FV, PV and PMT, inflows and
outflows should have different signs (positive and negative). Which to use
for inflow or outflow is arbitrary; it depends on your point of view (saver
v. bank; borrower v. lender). I tend to choose the point of view that
results in a positive function result.

"Struggling College Student"

J

#### JoeU2004

See responses to your thread "Saving for College". I think the title of

For future reference, keep all related postings in the same (original)