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.

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 ¹ 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