Compound Interest in Google Sheets and Excel — FV Formula Guide

Excel and Google Sheets both have a built-in FV (Future Value) function that calculates compound interest. If you do not want to type the formula by hand or build a complicated multi-cell model, FV does it in one line.

The FV Function Syntax

=FV(rate, nper, pmt, [pv], [type])

• rate — interest rate per period (not per year)
• nper — total number of periods (not years)
• pmt — payment per period (your monthly contribution, entered as negative)
• pv — present value (your starting principal, entered as negative)
• type — 0 if payments are at end of period (default), 1 if at beginning

The brackets mean optional. If you skip pv, Excel assumes you start with $0. If you skip type, it assumes end-of-period payments.

Example 1 — $10,000 Lump Sum, 8%, 20 Years, No Contributions

Annual compounding:

=FV(0.08, 20, 0, -10000)

Result: $46,609.57

Breaking it down: rate is 0.08 (8% per year, annual compounding so per period = per year), nper is 20 years, pmt is 0 (no contributions), pv is -10000 (starting balance, negative because it is an outflow from your perspective).

Example 2 — Monthly Contributions Added

$10,000 starting + $200/month for 20 years at 8%:

For monthly compounding: rate = 0.08/12, nper = 20*12, pmt = -200, pv = -10000

=FV(0.08/12, 20*12, -200, -10000)

Result: $167,203.96

Notice we divided the rate by 12 (monthly periods) and multiplied years by 12 (240 total months). The pmt is now -200 because you contribute $200 each month.

Example 3 — Different Compounding Frequencies

Frequency	Rate per period	Periods (20 yr)	Formula	Result
Annually	0.08	20	=FV(0.08,20,-200*12,-10000)	$163,729
Quarterly	0.08/4	80	=FV(0.08/4,80,-200*3,-10000)	$166,180
Monthly	0.08/12	240	=FV(0.08/12,240,-200,-10000)	$167,204
Daily	0.08/365	7300	=FV(0.08/365,7300,-200*12/365,-10000)	$167,432

Daily compounding edges out monthly by about $228 over 20 years. Almost no difference in practice.

Why the Sign Convention Trips People Up

Excel treats money flowing OUT of your pocket as negative and money flowing IN as positive. Your investment (pv) and contributions (pmt) flow OUT, so they are negative. The future value (the result) comes back positive.

If you enter pv and pmt as positive, Excel returns a negative future value. The math is correct, just inverted. To get a positive answer, either flip the input signs or wrap the formula:

=-FV(0.08/12, 240, 200, 10000) also returns $167,204.

Building It Manually Without FV()

If you want to see the year-by-year breakdown instead of one final number, build a table. In column A list years 0 through 20. In column B put your starting balance in row 0 and a formula like =B1*(1+0.08)+200*12 in row 2 onward. Drag down. You will see the balance grow each year.

For monthly granularity, do the same but with months in column A and a formula like =B1*(1+0.08/12)+200. This is useful for retirement planning where you want to see the curve, not just the endpoint.

The Catch With Spreadsheet Calculations

Spreadsheets give you exact answers based on your inputs, but they cannot tell you whether your assumptions are realistic. An 8% return assumed for 30 years is the historical S&P 500 average, but any single 30-year window could return 5% or 12%. Run multiple scenarios with different rates to see the range of outcomes, not just one optimistic projection.

The compound interest calculator gives you the same FV math without setting up a spreadsheet. Better for one-off calculations and quick "what if" testing.