Chartered Financial Analyst specializing in time value of money, compound growth analysis, and personal investment strategies.
The **Future Value of Single Deposit Calculator** determines how much a one-time investment will be worth at a specific point in the future, assuming a fixed interest rate and compounding frequency. This calculation is the foundation of compound interest. Enter values for any three of the four core parameters (Present Value, Future Value, Rate, or Time) to solve for the missing one.
Future Value of Single Deposit Calculator
Instructions: Enter values for any three of the four core parameters to solve for the missing one.
Future Value Parameters (Single Deposit)
Future Value Formula (Single Deposit)
The Future Value ($FV$) is calculated using the simple compound interest formula:
Future Value ($FV$):
$$FV = PV \times (1 + r)^{n}$$ Formula Source: InvestopediaVariables Explained (P, F, V, Q – Parameters)
- $PV$ (Present Value, $P$): The current, initial value of a sum of money or investment.
- $FV$ (Future Value, $F$): The value of the asset at a specified date in the future.
- $r$ (Interest Rate, $V$): The interest rate per period, expressed as a decimal (e.g., 5% becomes 0.05).
- $n$ (Number of Periods, $Q$): The total number of compounding periods (e.g., years, quarters, months).
Related Compound Interest Calculators
Explore growth potential for complex deposit strategies:
- Present Value Calculator
- Compound Interest Calculator (Recurring Deposits)
- Compound Annual Growth Rate Calculator
- Rule of 72 Calculator
What is Future Value of a Single Deposit?
The **Future Value (FV) of a single deposit** is the value that a single lump-sum amount of money will grow to in the future due to compounding interest. It is arguably the most fundamental concept in the Time Value of Money (TVM), demonstrating the power of compounding over time without introducing the complexities of recurring payments (annuities).
This calculation is crucial for investors who want to project the growth of an inheritance, a one-time bonus, or an initial capital investment. The key inputs—the present value ($PV$), the period interest rate ($r$), and the number of periods ($n$)—determine the final outcome. A higher rate or longer time period dramatically increases the FV due to exponential growth.
How to Calculate Future Value (Example)
Assume an initial deposit ($PV$) of \$10,000 invested at a 5% annual rate ($r$) for 10 years ($n$). We solve for the Future Value ($FV$):
- Step 1: Identify Parameters
$PV = \$10,000$, $r = 0.05$ (5%), and $n = 10$.
- Step 2: Calculate the Growth Factor
$(1 + r)^n = (1 + 0.05)^{10} \approx 1.628895$.
- Step 3: Apply the FV Formula
$FV = PV \times (1 + r)^{n} = \$10,000 \times 1.628895 = \mathbf{\$16,288.95}$.
The Future Value of the \$10,000 deposit after 10 years is $\mathbf{\$16,288.95}$.
Frequently Asked Questions (FAQ)
While the rate ($r$) and the initial deposit ($PV$) matter, the **time period ($n$)** is often the most impactful factor due to the exponential nature of compounding (interest earning interest).
If interest compounds more frequently (e.g., monthly vs. annually), the final FV will be slightly higher. In that case, you must adjust $r$ (annual rate divided by frequency) and $n$ (years multiplied by frequency).
They are inverse calculations. To find $PV$, you discount the $FV$. To find $FV$, you compound the $PV$. $PV = FV / (1 + r)^n$.
This calculator handles only a single, lump-sum deposit ($PV$). The Compound Interest Calculator typically adds a second input for periodic, recurring deposits (annuities) alongside the initial lump sum.