Future Value Calculator is a finance tool used to calculate the value of a cash flow at a later date than originally received using a constant interest rate. This idea that an amount today is worth a different amount than at a future time is based on the time value of money
- Future Value:
- What does Future Value mean?
- Future value (FV) is the value of a current asset at a specified date in the future based on an assumed rate of growth.
- Importance of Future Value
- The future value formula is essentially used in various areas of finance. IT also allows investors to account for recurring deposits, annual interest rates, and taxes. This formula can be incorporated into other formulas.
FV = PV * [(1 + R)T]
- FV = Future value of your goal
- PV = Present value or current cost of your goal
- r = annual rate of inflation
- T = time left to reach your goals (in years)
If a sum of $1,000 invested for 5 years in a savings account. That is having 10% compounding interest rate. Then according to the formula, the future value will be:-
FV = $1,000 * [(1 + 0.10)5], therefore, $1,610.51.
- May 13, 2018
- Tool Launched