Understanding Future Value Formulas

The video tutorial explains an Excel FV formula, focusing on investment duration, APR, and monthly investment amounts. It breaks down the formula to show how to calculate the number of years of investment, the annual percentage rate (APR), and the monthly investment amount. The tutorial uses a practical example to illustrate these concepts, making it easier to understand how the formula works in real-life scenarios.

What does the FV formula in Excel help you calculate?

• Interest rate of a loan

• Monthly payment of a mortgage

• Current value of an investment

• Future value of an investment

In the FV formula, what does the first part of the formula represent?

• The future value

• The interest rate

• The investment duration

• The monthly investment amount

How many years is the person investing according to the formula?

• 18 years

• 12 years

• 36 years

• 24 years

What does the number 12 represent in the context of the investment duration?

• The monthly investment amount

• The interest rate

• The number of months in a year

• The number of years

What does the middle part of the formula represent?

• The monthly investment amount

• The interest rate

• The investment duration

• The future value

How is the investment duration calculated in the formula?

• By dividing the number of years by 12

• By multiplying the number of years by 12

• By subtracting the number of years from 12

• By adding the number of years to 12

What is the significance of the number 18 in the formula?

• It represents the number of months

• It represents the number of years

• It represents the interest rate

• It represents the monthly investment amount

What is the APR in the given formula?

• 3.7%

• 18%

• 37%

• 12%

How is the APR adjusted for monthly calculations?

• Subtracted from 12

• Added to 12

• Multiplied by 12

• Divided by 12

What does the number 037 represent in the formula?

• The monthly investment amount

• The investment duration

• The annual interest rate

• The monthly interest rate