Future Value Calculator

Future value at a glance#

Future value (FV) is what a sum of money will be worth after it earns a steady rate of return for a set number of years. For a one-time lump sum, the formula is FV = PV(1 + r)^n, where PV is the present amount you start with, r is the annual interest rate written as a decimal, and n is the number of years.

Worked example: $5,000 invested at 7% for 10 years. Write 7% as 0.07, so FV = 5000 times 1.07^10 = $9,835.76. The money grows by $4,835.76 because each year's interest also earns interest, which is what compounding means.

This table shows what $1,000 today grows into at three common rates of return, using the same formula:

If you add money every year instead of investing once, use the future value of an annuity: FV = PMT times [((1 + r)^n - 1) / r], where PMT is the amount you add each period. Adding $1,000 a year at 6% for 10 years gives FV = 1000 times [(1.06^10 - 1) / 0.06] = $13,180.79. Combine the two formulas when you have both a starting balance and regular contributions.

Enter your starting amount, interest rate, number of years and any periodic deposit in the calculator above for the exact future value. Real returns vary year to year, so treat the result as an estimate that assumes a constant rate.

How to use the calculator#

Five inputs drive the result. Enter your present value (PV), the amount you start with. Set the interest rate as an annual percentage, such as 6. Choose the number of periods (N), usually years. Add a periodic deposit (PMT) if you contribute on a schedule, or leave it at zero for a single lump sum. Pick whether deposits land at the beginning or end of each period, then calculate.

Deposit timing changes the answer. Money added at the start of a period earns one extra period of growth, so beginning-of-period contributions finish slightly higher than end-of-period ones at the same rate.

Matching the rate to the period#

The rate and the period count have to use the same unit. For yearly figures, use the annual rate and the number of years. For monthly figures, divide the annual rate by 12 and multiply the number of years by 12, so 6% over 20 years becomes 0.5% over 240 months. Mixing an annual rate with a monthly period count is the most common mistake and inflates the result.

Future value tells you the nominal balance, not its buying power. To gauge real growth, subtract expected inflation from your rate before you calculate. A 6% return with 3% inflation behaves closer to 3% in current buying power.

Future value questions#

What is future value?#

Future value is what a sum of money is worth after it earns a set rate of return for a number of periods. For a lump sum it is FV = PV(1 + r)ⁿ, where PV is the starting amount, r is the rate as a decimal, and n is the number of periods.

How does the future value formula work?#

Each period multiplies the balance by (1 + r). Over n periods that compounds to (1 + r)ⁿ, which you multiply by the present value. $5,000 at 7% for 10 years is 5,000 times 1.07¹⁰, or $9,835.76.

Can a future value calculator account for periodic deposits?#

Yes. Add the future value of an annuity, PMT times ((1 + r)ⁿ - 1) / r, to the future value of your starting lump sum. The calculator above combines both when you fill in a periodic deposit.

What is the difference between future value and present value?#

Future value projects a present amount forward in time; present value discounts a future amount back to today. They are inverses: present value divides where future value multiplies by (1 + r)ⁿ.

How do I choose an interest rate?#

Use the expected rate of return for your investment, based on its type and history. A conservative estimate gives a safer projection, since a rate that is too high overstates the future balance.

Why does the time period matter so much?#

Because growth compounds. Doubling the number of years more than doubles the gain, as later periods earn returns on all the interest added in earlier periods. Long horizons benefit most from compounding.