Future Value Calculator
Use our Future Value Calculator to explore the time value of money and see how your investments can grow. This FV calculator lets you estimate the future value of money with compound interest, regular contributions, and different compounding frequencies — helping you make smarter financial decisions.
Investment Growth Over Time
| Period | Start Balance | Deposit | Interest | End Balance |
|---|
Future Value Calculator Results
Investment Parameters
Initial Investment (PV): $10,000
Currency: US Dollar ($)
Interest Rate (I/Y): 5%
Time Period: 10 years
Compounding Frequency: Annually
Periodic Deposit (PMT): None
Deposit Timing: End of period
Inflation Rate: 2.5%
Investment Summary
| Metric | Value |
|---|---|
| Future Value (FV) | $0 |
| Inflation-Adjusted Value | $0 |
| Present Value (PV) | $10,000 |
| Total Periodic Deposits | -$10,000 |
| Total Interest | $0 |
Periodic Schedule
| Period | Start Balance | Deposit | Interest | End Balance |
|---|
Note: The power of compounding means your money grows faster over time as you earn interest on both your principal and accumulated interest.
Understanding Future Value
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 FV calculation allows investors to predict, with varying degrees of accuracy, the amount of profit that can be generated by different investments.
The Power of Compound Interest
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods. This compounding effect causes wealth to grow exponentially over time, making it one of the most powerful concepts in finance.
Impact of Different Factors
| Factor | Impact on Future Value | Example |
|---|---|---|
| Higher Interest Rate | Exponentially increases FV | 5% vs 7% over 20 years |
| Longer Time Period | Dramatically increases FV | 10 vs 30 years at 6% |
| More Frequent Compounding | Moderately increases FV | Annual vs monthly compounding |
| Regular Contributions | Significantly increases FV | $100/month over 30 years |
| Beginning vs End Deposits | Slightly increases FV | Beginning deposits earn more interest |
The Rule of 72
The Rule of 72 is a simple way to estimate how long an investment will take to double given a fixed annual rate of interest. Divide 72 by the annual rate of return, and you'll get the approximate number of years it will take for your investment to double.
Example at 6%
72 ÷ 6 = 12 years to double your money
Example at 9%
72 ÷ 9 = 8 years to double your money
Inflation Considerations
Inflation reduces the purchasing power of money over time. Our calculator includes an inflation adjustment to show the "real" future value in today's dollars. Historically, inflation averages about 2-3% annually, but this can vary significantly.
Investment Comparison Examples
Lump sum investment
Initial: $10,000
Rate: 5%
Term: 20 years
Future Value: $26,533
Regular contributions
Initial: $0
Monthly contrib: $500
Rate: 7%
Term: 30 years
Future Value: $609,985
Combination strategy
Initial: $5,000
Monthly contrib: $100
Rate: 6%
Term: 40 years
Future Value: $250,578
The Power of Starting Early
Consider two investors: Alice starts investing $5,000 annually at age 25 and stops at 35 (10 years). Bob starts at 35 and invests $5,000 annually until 65 (30 years). Assuming 7% annual return:
- Alice: Invests $50,000, FV at 65: ~$602,070
- Bob: Invests $150,000, FV at 65: ~$505,365
Alice's early start gives her more despite investing less total money, demonstrating the power of compounding over time.
Understanding the Periodic Schedule
The periodic schedule shows exactly how your investment grows with each compounding period. Key things to notice:
- How your deposits are added according to your specified frequency
- How interest is calculated on the growing balance
- The snowball effect as your interest earns more interest over time
- The impact of deposit timing (beginning vs end of period)
Practical Applications
This calculator can help with various financial planning scenarios:
Retirement Planning
Calculate how much you need to save regularly to reach your retirement goals. Experiment with different contribution amounts and time horizons.
Education Savings
Plan for your child's education by estimating future costs and determining how much to save each month to reach your target.
Debt Payoff
While primarily for investments, you can reverse the calculation to understand how debt compounds over time.
Wealth Building
See how small, regular investments can grow into substantial sums over decades, demonstrating the importance of starting early.
Financial Calculator Terms
Historical Returns
Compounding Examples
$10,000 at 5% for 10y: $16,289
$100/mo at 7% for 30y: $121,997
$5,000 at 8% for 20y: $23,305
Use beginning-of-period deposits when possible to maximize compounding effects. Even small timing differences add up over decades.
Increase your periodic deposits whenever possible (raises, bonuses) to accelerate growth. Small increases can have large impacts over time.
Review the periodic schedule to understand exactly how your money grows over time. Notice how interest starts small but grows exponentially.
Consider inflation when planning long-term goals. What seems like a large amount today may have less purchasing power in the future.
Experiment with different scenarios to find the right balance between contribution amount and time horizon for your goals.
PV (Present Value)
The current value of your investment or the initial lump sum amount.
FV (Future Value)
The value of your investment at a future date after applying compound interest.
I/Y (Interest/Yield)
The annual interest rate or yield expected from the investment.
PMT (Payment)
The periodic deposit amount added to the investment.
N (Number of Periods)
The total number of compounding periods for the investment.
Compounding
The process where interest is calculated on both principal and accumulated interest.