Future Value Calculator
Calculate the future value of your investments with compound interest
Results
Enter values and click Calculate to see results
What is Future Value?
Future Value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value is important to investors and financial planners, as they use it to estimate how much an investment made today will be worth in the future.
Key Concepts
Compound Interest
Interest calculated on the initial principal and accumulated interest from previous periods. This creates exponential growth over time.
Time Value of Money
The concept that money available today is worth more than the same amount in the future due to its potential earning capacity.
Regular Contributions
Periodic deposits (monthly, quarterly, etc.) that compound along with your initial investment, significantly boosting long-term growth.
Inflation Impact
The decrease in purchasing power over time. Real value adjusts nominal returns to show actual buying power in future dollars.
Formulas Used
Lump Sum FV: FV = PV × (1 + r/n)^(n×t)
With Regular Contributions: FV = C × [((1 + r/n)^(n×t) - 1) / (r/n)]
Continuous Compounding: FV = PV × e^(r×t)
Real Value: FV_real = FV_nominal / (1 + inflation)^t
Understanding APR vs APY
APR (Annual Percentage Rate) is the yearly interest rate without compounding.APY (Annual Percentage Yield) includes the effect of compounding. The more frequently interest compounds, the greater the difference between APR and APY.
Payment Timing: End vs Begin
End of Period (Ordinary Annuity): Contributions are made at the end of each period. This is the most common scenario for investments like 401(k) contributions.
Beginning of Period (Annuity Due): Contributions are made at the start of each period. This results in slightly higher returns as each payment has an extra period to compound.
Frequently Asked Questions
How accurate is this calculator?
Our calculator uses precise mathematical formulas and handles edge cases like near-zero interest rates. Results are accurate to 6 decimal places, though real-world returns may vary due to market conditions.
What is the difference between nominal and real value?
Nominal value is the raw future amount without adjusting for inflation. Real value shows the actual purchasing power in today's dollars by accounting for inflation's erosive effect over time.
How do variable interest rates work?
You can add segments with different interest rates for specific time periods. This is useful for modeling scenarios like promotional rates, expected rate changes, or different investment phases.
Should I include taxes in my calculation?
Including capital gains tax provides a more realistic picture of your after-tax returns. The calculator applies tax only to the gains (interest earned), not the principal amount.
What compounding frequency should I choose?
Choose the frequency that matches your investment. Savings accounts typically compound daily or monthly, bonds often compound semi-annually, while some investments compound annually. More frequent compounding results in higher returns.