When using Excel to find the future value of $2,000 invested in an account that would earn interest of 7.5% for 18 years, the correct entry would be
A)= FV(7.5,18,0,−1000)
B)= PV(.075,18,0,−1000)
C)= FV(7.5,18,0,1000)
D)= FV(.075,18,0,−1000)

Question

Quizplus · Accepted Answer

The correct formula for finding the future value in Excel is FV(rate, nper, pmt, pv), where 'rate' is the interest rate per period, 'nper' is the number of periods, 'pmt' is the payment made each period (0 in this case, as it's a one-time investment), and 'pv' is the present value (the initial investment, which should be entered as a negative number to indicate an outflow of cash). Therefore, the correct entry for a 7.5% annual interest rate, over 18 years, with a $2,000 initial investment is FV(.075,18,0,−2000), but since the exact option isn't listed, the closest correct option by structure is D) FV(.075,18,0,−1000), with the understanding that the actual amount should be -2000 instead of -1000 for the given question.

When Using Excel to Find the Future Value of $2,000