Expert in financial modeling, compound interest, and time value of money analysis.
The **Future Value of Single Deposit Calculator** helps you predict the growth of a lump sum investment over time, assuming a fixed rate of compound interest. Enter any three variables (Present Value, Future Value, Rate, or Term) to solve for the missing one.
Future Value of Single Deposit Calculator
Instructions: Enter values for any three of the four core parameters (PV, FV, Rate, or Years) to solve for the missing one.
Time Value of Money Parameters
Future Value Formula (Single Deposit)
The calculation is based on the simple compound interest formula:
Future Value ($FV$):
$$FV = PV (1 + R)^N$$Where $R$ is the annual rate (decimal) and $N$ is the number of years.
Formula Source: InvestopediaVariables Explained (Q, F, P, V – Parameters)
- $PV$ (Present Value, $Q$): The current value of a lump sum investment.
- $FV$ (Future Value, $F$): The value of the investment after $N$ years (or calculated).
- $R$ (Annual Interest Rate, $P$): The yearly growth rate (used in decimal form for calculation).
- $N$ (Number of Years, $V$): The number of compounding periods (years).
Related Investment Planning Calculators
Explore related time-value-of-money concepts:
- Present Value Calculator
- Compound Interest Calculator
- Future Value of Annuity Calculator
- Compound Annual Growth Rate (CAGR) Calculator
What is Future Value?
The **Future Value (FV)** is the value of a current asset at a specified date in the future, based on an assumed rate of growth. The concept of future value is essential in finance because it helps investors and planners account for the time value of money—the idea that money available today is worth more than the same amount of money in the future due to its potential earning capacity (interest or returns).
By calculating the future value, individuals can determine if a specific investment is on track to meet their goals, such as saving for retirement or a child’s college education. It provides a direct forecast of investment performance based on known factors: the initial investment (PV), the interest rate (R), and the time horizon (N).
How to Calculate Future Value (Example)
Assume a Present Value ($PV$) of \$5,000, an Annual Rate ($R$) of 7%, and a term ($N$) of 5 years. We solve for the Future Value ($FV$):
- Step 1: Convert Rate to Decimal
Annual Rate $R = 7\% / 100 = 0.07$.
- Step 2: Apply the Formula
$$FV = \$5,000 \times (1 + 0.07)^5$$
- Step 3: Calculate the Result
$FV = \$5,000 \times (1.40255) \approx \mathbf{\$7,012.76}$.
The **Future Value** of the investment after 5 years is $\mathbf{\$7,012.76}$.
Frequently Asked Questions (FAQ)
The Future Value is higher due to compound interest. The initial investment earns interest, and then subsequent interest is earned on both the principal and the previously accrued interest, a process known as compounding.
No, this calculator provides a *nominal* future value, using the stated interest rate. To find the *real* future value (adjusted for buying power), you would need to use the calculated FV in conjunction with an inflation calculator.
Future Value (FV) calculates the value of a single, lump-sum deposit. Future Value of Annuity calculates the value of a series of equal, periodic deposits (like monthly savings).
Yes. Enter the Present Value, the Future Value, and the Number of Years, leaving the Annual Rate field empty. The calculator will determine the compound annual growth rate required to achieve that result.