How to Calculate Future Value
What is Future Value?
Future Value (FV) calculates what a current sum of money will be worth at a future date, given a rate of return. It is the foundation of investment planning — showing the power of compound growth over time.
Step-by-Step Guide
- 1FV of lump sum: FV = PV × (1 + r)^n
- 2FV of regular payments: FV = PMT × ((1+r)^n − 1) / r
- 3PV = present value, r = periodic rate, n = periods, PMT = payment amount
- 4Compounding frequency matters: daily > monthly > annually
Worked Examples
Input
$10,000 today at 8% for 20 years
Result
$46,610
More than 4× the original — compounding at work
Input
$500/month at 7% for 30 years
Result
$566,765
Only $180,000 contributed — $386k is growth
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