*In this article we will learn how to calculate the investment value for future or annuity for the present value by using the functions of Microsoft Excel.*

*When we made investment, the amount paid is entered in negative value so as to get the accurate result.*

*Annuity is the return we get and is written in positive because in future we have to pay interest amount along with principal amount.*

**INVESTMENT**:

Let’s take an example and understand:

We want to invest $1000 every year, on the 10% rate of interest and for 10 years, then how much total value we will get after 10 years?

To calculate Future Value follow below given steps:-

- Enter the function in cell B11

- Select annual rate
- Select number of years
- And then select yearly payment

As per the calculation, if we pay $1,000 in a year it means we have to pay $10,000, after 10 years we will get $15,937.42.

Note: In this function last two arguments are optional, if we omit it, then function assumes that payments are due at the end of the period.

**ANNUITY**:

We need to purchase annuity for 12 years with the amount $200 on monthly basis and rate of interest is 8%, how much does the annuity cost?

Follow below given steps:

- Enter the Present value’s function in cell B11

- Select rate of interest and divide by 12 to calculate the monthly rate of interest
- Then select years and multiply by 12, to calculate the total value
- Select monthly payment

As per the result, we have to pay $18,476.56 till the 12 years or we can do onetime payment.

**Note**: The last two arguments are optional. If omitted, Fv = 0 (no future value). If Type is omitted, it is assumed that payments are due at the end of the period. This annuity does not take into account life expectancy, inflation etc

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