David is a Chartered Financial Analyst with 15 years of experience in investment analysis and financial planning.
This 4-in-1 Future Value (FV) calculator helps you see how your money can grow over time. Enter any three variables—Future Value, Present Value, Annual Rate, or Term—to solve for the fourth.
Future Value Calculator
Future Value Formulas
FV = PV * (1 + r)^t
Solve for Present Value (PV):
PV = FV / (1 + r)^t
Solve for Rate (r):
r = ( (FV / PV)^(1/t) ) – 1
Solve for Term (t):
t = ln(FV / PV) / ln(1 + r)
Formula Variables
- (FV) Future Value: The total value of the investment at the end of the term.
- (PV) Present Value: The starting amount of money (initial investment or principal).
- (R) Annual Rate: The annual interest rate, entered as a percentage (e.g., 8 for 8%).
- (T) Term (Years): The total number of years the money is invested.
- (r): Rate per period (R / 100)
- (t): Number of periods (T)
Related Calculators
What is Future Value?
Future Value (FV) is a fundamental concept in finance that determines the value of a current asset at a specified date in the future. It is based on the assumption that the asset will grow at a certain rate of return (or interest rate) over time. In essence, it tells you what your money will be worth later, thanks to the power of compound interest.
Understanding future value is crucial for planning and making financial decisions. It allows you to see how much a $10,000 investment today might be worth in 20 years, or how much you need to save to reach a $1 million retirement goal. It’s the opposite of Present Value (PV), which calculates what a future sum of money is worth today.
This calculator is based on the standard compound interest formula, assuming interest is compounded once per period (annually, in this case). The ‘compounding effect’ means you earn interest not only on your initial principal but also on the interest that has already accumulated.
How to Calculate Future Value (Example)
-
Identify Your Investment Details
You have $10,000 (PV) to invest. You find an investment that provides an 8% (R) annual return. You plan to leave the money invested for 10 years (T). You want to find its future value (FV).
-
Find the Rate (r) and Term (t)
Rate (r) = 8% / 100 = 0.08
Term (t) = 10 years -
Apply the Future Value Formula
The formula is: FV = PV * (1 + r)^t
-
Calculate the Value
FV = $10,000 * (1 + 0.08)^10
FV = $10,000 * (1.08)^10
FV = $10,000 * 2.15892 -
Final Result
Your investment’s future value (FV) after 10 years will be $21,589.25.
Frequently Asked Questions (FAQ)
They are very closely related. “Compound interest” is the *process* of earning interest on interest. “Future Value” is the *result* of that process. The Future Value formula is the mathematical model used to calculate the effect of compound interest on a sum of money over time.
How do I find the interest rate I need?You can use this calculator. Enter your Present Value (PV), your target Future Value (FV), and the Term (T) you have to get there. Leave the “Annual Rate (R)” field blank and click “Calculate.” The result will show you the annual rate of return you need to achieve your goal.
What if interest is compounded monthly?This calculator assumes annual compounding (once per year). For monthly compounding, you would divide the annual rate by 12 and multiply the term by 12. For simplicity, this 4-function calculator keeps the periods and rate in annual terms.
What is the “Present Value” (PV)?Present Value is the opposite of Future Value. It’s the amount of money you would need to invest *today* to have a specific amount of money in the future, given a certain interest rate. You can solve for it by filling in FV, R, and T and leaving PV blank.