FUTURE_VALUE Function
Evaluates the future value of an investment.
Usage
result = FUTURE_VALUE(rate, n_periods, payment, present_value, when)
Input Parameters
rate—Interest rate.
n_periods—Total number of payment periods.
payment—Payment made in each period.
present_value—The current value of a stream of future payments, after
discounting the payments using some interest rate.
discounting the payments using some interest rate.
when—Time in each period when the payment is made, either 0 for at the end of period or 1 for at the beginning of period.
Returned Value
result—The future value of an investment. If no result can be computed, NaN is returned.
Input Keywords
Double—If present and nonzero, double precision is used.
Discussion
FUTURE_VALUE computes the future value of an investment. The future value is the value, at some time in the future, of a current amount and a stream of payments. It can be found by solving the following:
If rate = 0:
present_value + (payment)(n_periods) + future_value = 0
If rate ≠ 0:
Example
In this example, FUTURE_VALUE computes the value of $30,000 payment made annually at the beginning of each year for the next 20 years with an annual interest rate of 5%.
PRINT, FUTURE_VALUE(0.05, 20, -30000.00, -30000.00, 1)
; PV-WAVE prints: 1.12118e+06
