Connect with us

# Future Value Calculator [With Formula and Explanation]

Published

on If you’re like most people, you probably want to make sure that your money is working for you. You may have heard about the power of compound interest, and how it can help your money grow over time. But how do you know what rate of return to expect from your investments? This future value calculator can help!

# Future Value Calculator

Year Value

## What is future value?

Future value is the value of an asset or cash at a specific date in the future. It’s calculated based on the present value of the asset or cash, the interest rate, and the number of years until the future date. Basically, it tells you how much your money will be worth in the future if you invest it at a certain interest rate.

## How to use the future value calculator

Now, let’s talk about how to use this calculator. It’s super easy! First, enter the present value of your asset or cash in the ‘Present Value’ field. This is how much your money is worth right now.

Next, enter the interest rate in the ‘Interest Rate’ field. This is the rate at which your money will grow each year, or annual interest rate. Then, enter the number of years until the future date in the ‘Years’ field.

If you want to make periodic deposits (PMT), enter the amount of each deposit in the ‘Periodic Deposit (PMT)’ field. You can also choose if the PMT is made at the start or end of each period using the ‘PMT Type’ dropdown.

Once you’ve entered all of your information, click on the ‘Calculate’ button and voila! The calculator will display the future value of your asset or cash and a schedule showing its value at the end of each year.

That’s it! Easy peasy.

### Future value formula

The formula for future value is:

FV = PV * (1 + r)^n

Where:

• FV = Future Value
• PV = Present Value
• r = Interest Rate (as a decimal)
• n = Number of Compounding Periods

This formula assumes that the interest is compounded once per period. If interest is compounded more frequently, the formula becomes:

FV = PV * (1 + r/m)^(n*m)

Where:

• m = Number of times interest is compounded per period

If you are making periodic deposits (PMT), the future value formula becomes:

FV = PV * (1 + r)^n + PMT * (((1 + r)^n - 1) / r) * (1 + r*t)

Where:

• PMT = Periodic Deposit
• t = 1 if deposits are made at the start of each period, and 0 if deposits are made at the end of each period.

## Future value calculation wrap up

With the future value calculator, you can easily plan your investments and see how your money can grow over time. Whether you’re saving for a big purchase, planning for retirement, or just curious about the power of compound interest, this calculator has got you covered.