Future Value Calculator
Calculate the future value of your investments. See how much your money will grow with compound interest over time.
Type of investment
Starting amount invested today
Amount added each period (for annuity)
Expected annual return rate
Investment time horizon
How often interest compounds
When contributions are made
What is future value and how is it calculated?
Future Value (FV) shows what an investment will be worth at a future date, accounting for compound interest. It answers: "If I invest $X today, what will it be worth in Y years?" Formula: FV = PV × (1 + r)^t for lump sum, or FV = PV × (1+r)^t + PMT × [((1+r)^t - 1) / r] for regular contributions. Used for retirement planning, savings goals, investment projections. Key: Even small amounts grow substantially over time due to compounding.
How does compounding frequency affect future value?
More frequent compounding = higher future value. Example $10,000 at 8% for 10 years: Annual compounding = $21,589, Quarterly = $21,989 (+$400), Monthly = $22,196 (+$607), Daily = $22,253 (+$664). Difference matters more with: Higher interest rates, longer timeframes, larger principal amounts. Daily vs annual compounding adds ~0.3-0.5% to effective returns. For retirement (30+ years), this can mean tens of thousands more.
What's the difference between lump sum and annuity future value?
Lump sum FV: One-time investment grows with compound interest. Good for: Inheritance, bonus, windfall. Formula: FV = PV(1+r)^t. Annuity FV: Regular periodic payments plus compound interest. Good for: Monthly savings, 401k contributions, regular investing. Formula: FV = PMT × [((1+r)^t - 1) / r] × (1+r). Annuity typically builds more wealth through dollar-cost averaging and consistent contributions despite market fluctuations.
How do I use future value for retirement planning?
Calculate retirement needs in 3 steps: 1) Determine future annual expenses (today's $50k = $134k in 30 years at 3% inflation), 2) Calculate lump sum needed (25x annual expenses = $3.35M using 4% rule), 3) Work backwards to required savings rate. Example: Need $1M in 25 years, starting with $50k, 8% return = save $862/month. Adjust for: Social Security, pension, part-time work, healthcare costs, travel goals.