Bishawajit Chakraborty
The word salary is derived from the Latin letter “salarium,” which was granted to Roman troops in the past in addition to their rightful pay. The salary calculator is very useful and important to calculate and know the employee’s growth status as well as to estimate the additions and deductions that the company makes from the employee’s compensation. There is a difference between the gross and net salaries that are earned, and the salary is made up of a number of components. The following is a possible arrangement for an employee’s pay. This article will show you how to make a future salary calculator in Microsoft Excel.
Download Practice Workbook
You may download the following Excel workbook for better understanding and practice it by yourself.
Step-by-Step Procedures to Make a Future Calculator in Excel
Here, we will demonstrate to you to make a future salary calculator by applying the FV function (Future Value).
Step 1. Creating Data set
- Here is our sample data set with salary components and their respective values.
Read More: How to Calculate Basic Salary in Excel (3 Common Cases)
Step 2. Calculating Gross Salary
- Firstly, select the C13 cell.
- After that, write down the following formula to determine the Gross salary using the SUM function.
=SUM(C5:C9)- Then, press ENTER.
- Therefore, you will see the gross salary in the given image.
Read More: How to Calculate Gross Salary in Excel (3 Useful Methods)
Step 3. Evaluating Net Salary
- Firstly, choose the C13 cell.
- After that, write down the following formula to determine the Net salary by subtracting the summation of Income tax and Provident fund from the Gross salary using the SUM function.
=C12-SUM(C10:C11)- Then, hit ENTER.
- So, this is our final net salary which we have calculated to determine our future salary.
Read More: How to Calculate Net Salary in Excel (With Easy Steps)
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Step 4. Applying FV Function
The value of a number of recurrent payments made at a specific future date at a specific rate of return or discount rate is referred to as the future value of an annuity. The value of the future annuity increases with the rate to determine how valuable a series of payments will be at some point in the future. The FV function used to determine the future value annuity factor is depicted in the following diagram.
Syntax of the FV Function
=FV(rate, nper, pmt, [pv], [type])Arguments of the FV Function
- Rate – The interest rate per period.
- Nper – The total number of payment periods.
- Pmt – The payment made each period. Must be entered as a negative number.
- PV – The present value of future payments. If omitted, assumed to be zero. Must be entered as a negative number [optional].
- Type -When payments are due. 0 = end of period, 1 = beginning of period. The default is 0 [optional].
- Firstly, choose cell C17. cell.
- Secondly, write down the following formula in cell C17.
=FV(C14/C16,C15*C16,0,-C13)- Then, press ENTER.
- Here, we will calculate the future salary using a general arithmetic formula to compare the result between the FV function and the general arithmetic formula.
- Finally, you will see in the given image that the value of future salary is the same for the FV function and the general arithmetic formula.
Read More: How to Create Salary Slip Format with Formula in Excel Sheet
Step 5. Future Salary Calculator
If you enter your current salary, the anticipated annual percentage salary growth, and the number of years you wish to predict your salary for, the Salary Calculator will determine what your future salary will be.
- Therefore, this is the future salary calculator obtained from the FV function.
Read More: How to Make Salary Sheet in Excel with Formula (with Detailed Steps)
Conclusion
In this article, we’ve covered step-by-step procedures to make a future salary calculator in Excel. We sincerely hope you enjoyed and learned a lot from this article. Additionally, if you want to read more articles on Excel, you may visit our website, Exceldemy. If you have any questions, comments, or recommendations, kindly leave them in the comment section below.
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