The Future Value (FV) function in Excel 2013 is found on the Financial button’s drop-down menu on the Ribbon’s Formulas tab (Alt+MI). The FV function calculates the future value of an investment. The syntax of this function is

=FV(rate,nper,pmt,[pv],[type])

The *rate, nper, pmt, *and *type *arguments are the same as those used by the PV function. The *pv *argument is the present value or lump-sum amount for which you want to calculate the future value. As with the *fv *and *type *arguments in the PV function, both the *pv *and *type *arguments are optional in the FV function.

If you omit these arguments, Excel assumes their values to be zero (0) in the function.

You can use the FV function to calculate the future value of an investment, such as an IRA (Individual Retirement Account). For example, suppose that you establish an IRA at age 43 and will retire 22 years from now at age 65 and that you plan to make annual payments into the IRA at the beginning of each year. If you assume a rate of return of 2.5 percent a year, you would enter the following FV function in your worksheet:

=FV(2.5%,22,–1500,,1)

Excel then indicates that you can expect a future value of $44,376.64 for your IRA when you retire at age 65. If you had established the IRA a year prior and the account already has a present value of $1,538, you would amend the FV function as follows:

=FV(2.5%,22,–1500,–1538,1)

In this case, Excel indicates that you can expect a future value of $47,024.42 for your IRA at retirement.