Future Value Calculator
Calculate the future value of your investment with daily, monthly, or yearly compounding
FV = Future Value
PV = Present Value
i = Interest rate per period (as decimal)
n = Number of periods
Future Value Calculator
Our Basic Future Value Calculator is a powerful tool designed to help you understand how a single sum of money invested today can grow over time. By calculating the future value (FV), you can make informed decisions about investments, savings goals, and the real impact of compound interest. This calculator allows you to set time periods to years with interest compounded daily, monthly, or yearly, providing a clear picture of your investment’s potential.
The Future Value Formula
The entire calculation is based on a fundamental financial formula:
FV = PV(1 + i)<sup>n</sup>
Where:
- FV = future value
- PV = present value (the initial amount of money)
- i = interest rate per period in decimal form
- n = number of periods
This future value formula states that the future value is equal to the present value multiplied by the sum of 1 plus the interest rate per period, raised to the number of time periods.
A critical rule when using this formula is to ensure that your time period, interest rate, and compounding frequency are all in the same time unit. For example, if compounding occurs monthly, the number of time periods should be the number of months, and the interest rate should be converted to a monthly interest rate rather than yearly.
For more complex scenarios involving multiple regular payments, you might find our Future Value Annuity Calculator more appropriate.
How to Use the Basic Future Value Calculator
To get an accurate result, you need to input the following values correctly:
- Number of Years: Use whole numbers or decimals for partial periods. For instance, for an investment period of 7 years and 6 months, you would input 7.5 years.
- Interest Rate (I): This is the nominal or stated annual interest rate as a percentage. The calculator internally converts it to a decimal (i = I/100) for the formula.
- Compounding: Select how often the interest is compounded—daily, monthly, or yearly. This choice directly affects the growth of your investment.
- Present Value (PV): This is the lump sum of money you are investing today.
After entering these values, the calculator will provide two key outputs:
- Future Value (FV): This is the final result, showing how much your present value will grow to in the future, given the interest and time.
- Future Value Interest Factor (FVIF): This factor, calculated as FVIF = (1 + i)<sup>n</sup>, is incredibly useful. You can apply this factor to any other present value amount to find its future value under the same investment length, interest rate, and compounding frequency. Simply multiply any PV by the FVIF.
If you need to see how these factors are applied across a range of rates and periods, our Future Value Table is an excellent reference tool.
Future Value Example Problem
Let’s walk through the default example in the calculator: What is the future value of $12,487.16 invested for 3.5 years, compounded monthly at an annual interest rate of 5.25%?
- Convert Years to Months: Since compounding is monthly, we convert the time period.
- 3.5 years × 12 = 42 months
- So, n = 42
- Convert Annual Rate to Monthly Rate:
- First, convert the percentage to a decimal: 5.25 / 100 = 0.0525
- Then, divide by 12 to get the monthly rate: 0.0525 / 12 = 0.004375
- So, i = 0.004375
- Perform the Calculation:
- FV = PV(1 + i)<sup>n</sup>
- FV = 12487.16 × (1 + 0.004375)<sup>42</sup>
- FV = 12487.16 × (1.004375)<sup>42</sup>
- FV = 12487.16 × 1.201233824
- FV = $15,000.00
Future Value Interest Factor (FVIF) Example Problem
Using the same problem, we can calculate the FVIF separately.
- FVIF = (1 + i)<sup>n</sup>
- FVIF = (1 + 0.004375)<sup>42</sup>
- FVIF = 1.201233824
This factor is powerful. Now, instead of $12,487.16, let’s find the future value of a present value of $16,649.55 using the same investment terms.
- FV = PV × FVIF
- FV = 16,649.55 × 1.201233824
- FV = $20,000.00
This demonstrates the utility of the FVIF. For a deeper dive into the mechanics and components of this calculation, you can explore our dedicated Future Value Formula resource.
Related Calculators for Advanced Scenarios
While our Basic Future Value Calculator is perfect for single lump-sum investments, financial planning often involves more complex situations. Our suite of financial calculators can help:
- If you are projecting the growth of an investment account where you make regular contributions, our Future Value Investment Account Calculator is the right tool for the job.
- For analyzing a series of unequal cash flows, such as from a business project, the Future Value Cash Flows Calculator can handle the irregular amounts.
- When comparing different investment options with varying rates and terms, our standard Future Value Investment Calculator offers a straightforward comparison.
- For those working specifically with annuities and need a quick reference for factors, our Future Value Table Annuity provides a comprehensive grid of pre-calculated values.
No matter your financial question, our collection of tools, including the main Future Value Calculator, is designed to give you the clarity and confidence to plan for your future.