Investment specialist and expert in retirement planning and future value analysis.
The **Future Value of Single Deposit Calculator** determines the total value (Future Value) of a single, one-time investment after it has compounded for a specified number of periods. Enter any three of the core parameters ($\text{PV}, \text{FV}, R, N$) to solve for the missing one.
Future Value of Single Deposit Calculator
Instructions: Enter values for exactly three of the four core parameters to solve for the missing one.
Compounding Parameters
FV Single Deposit Formula
The core relationship for the Future Value of a single lump-sum deposit:
$$FV = PV (1 + R)^{N}$$This is the fundamental compound interest formula.
Formula Source: InvestopediaVariables Explained (Q, F, P, V – Parameters)
- $\text{PV}$ (Present Value, $Q$): The initial amount of money deposited or invested today.
- $\text{FV}$ (Future Value, $F$): The total accumulated value of the investment at the end of the term.
- $R$ (Rate per Period, $P$): The interest rate per compounding period (e.g., annual rate / 12 for monthly).
- $N$ (Number of Periods, $V$): The total number of compounding periods (e.g., years $\times$ 12 for monthly compounding).
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- Present Value Calculator
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What is Future Value of Single Deposit?
The **Future Value of a Single Deposit** is the amount an initial lump-sum investment will grow to over a period of time, assuming a constant rate of interest is earned and compounded regularly. This concept is fundamental to financial planning and helps investors understand the potential growth of a one-time investment.
It differs significantly from the Future Value of an Annuity, which involves multiple recurring payments. Since only one payment is involved here, the calculation directly relies on the exponential power of compounding interest over the defined number of periods.
How to Calculate FV Single Deposit (Example)
An investor deposits \$10,000 today ($\text{PV}$) into an account earning a 6% annual rate (0.06), compounded monthly, for 10 years. We want to find the Future Value ($\text{FV}$).
- Step 1: Determine Per-Period Rate ($R$) and Total Periods ($N$)
$$R = 0.06 / 12 = 0.005$$ $$N = 10 \text{ years} \times 12 = 120 \text{ periods}$$
- Step 2: Calculate the Growth Factor
Calculate $(1 + R)^{N} = (1 + 0.005)^{120} \approx \mathbf{1.8194}$
- Step 3: Apply the Formula
$$FV = PV \times \text{Growth Factor}$$
- Step 4: Calculate the Result
$$FV = \$10,000 \times 1.8194 \approx \mathbf{\$18,193.97}$$
The Future Value of the single deposit is $\mathbf{\$18,193.97}$.
Frequently Asked Questions (FAQ)
Future Value (FV) is the value of money at a future date. Present Value (PV) is the value of money today. They are two sides of the same time-value-of-money coin, linked by the interest rate and time period.
Yes, significantly. The more frequently the interest is compounded (e.g., daily vs. annually), the higher the final Future Value will be, even if the annual rate is the same, due to the effect of earning interest on previously earned interest more often.
Yes. If you know how much you invested ($\text{PV}$), how long you invested it for ($N$), and the final value ($\text{FV}$), the calculator can solve for the required rate of return ($R$).
It is used for simple lump-sum investments like CDs, zero-coupon bonds, or any scenario where a single amount is invested and allowed to grow untouched.