FinanceTier 515 minintermediate

Future Value of a Savings Plan

Project the future value of a monthly savings contribution over several years.

What you will learn

• Convert an annual rate and a term in years into the monthly periods FV expects
• Explain why mixing a monthly contribution with annual rate/period figures produces a meaningless result
• Distinguish a savings plan (regular contributions) from a single lump-sum investment

Excel skills

FV · Financial Functions

The task

A monthly contribution is being invested at an annual rate over a term in years. In B4, project the future value with FV, converting the rate and term to a monthly basis to match the monthly contribution.

You work in a real spreadsheet in your browser, and your answer is checked against hidden traps the moment you submit.

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