How to Calculate FVIFA in Excel

Updated April 19, 2025

Understanding the future value of your money is crucial for anyone planning investments, loans, or retirement savings. One tool that makes this easier is the future value interest factor of an annuity (FVIFA), which helps calculate how much a series of regular payments will grow over time with compound interest.

What is FVIFA?

The future value interest factor of an annuity (FVIFA) is a financial tool used to calculate the future value of a series of $1 payments—such as monthly deposits or loan installments—when they grow with a consistent interest rate over time. It’s all about leveraging the power of compound interest. Whether you’re saving for a major goal like retirement or calculating the total cost of a loan, FVIFA simplifies the process by reducing the need for complex math.

By using $1 as the base amount, FVIFA is a flexible factor that can be applied to any payment size. For example, if you’re dealing with $1,000 payments, you simply multiply the FVIFA by 1,000 to get the total future value.

How to calculate FVIFA in Excel

Calculating FVIFA in Excel is simple once you understand the formula and how to input it. The FVIFA formula is:

\text{FVIFA} = \frac{(1 + r)^n - 1}{r}

Where:

r is the interest rate per period (e.g., 5% as 0.05)
n is the number of periods (e.g., months or years)

Calculating it in Excel

Enter your data:
1. In cell A1, type Interest Rate; in A2, enter 0.05.
2. In cell B1, type Periods; in B2, enter 10.
Calculate FVIFA:
1. In cell C1, type FVIFA; in C2, type =((1+A2)^B2-1)/A2.
2. Press Enter, and you’ll get FVIFA, which is 12.5779.
Calculate the future value (optional):
If you’re saving a fixed amount, like $1,000 per year, and want to know the future value of these savings over the course of 10 years with the given interest rate, you can calculate it by multiplying the FVIFA by your payment amount.
1. In cell D1, type Future Value; in D2, type =C2*1000.
2. Press Enter, and Excel will return the future value, which is approximately $12,577.89 in this case. This value represents the total amount you would have at the end of the 10 years, considering both the compound interest and the annual payments.