Future Value Calculator
Estimate how much your money will grow with compound interest and regular contributions.
Investment Details
At 3% inflation, your $113,669 will buy what $84,581 buys today.
Year-by-Year Growth
| Year | Invested | Interest | Total |
|---|---|---|---|
| Year 1 | $16,000 | +$1,055 | $17,055 |
| Year 2 | $22,000 | +$2,695 | $24,695 |
| Year 3 | $28,000 | +$4,970 | $32,970 |
| Year 4 | $34,000 | +$7,932 | $41,932 |
| Year 5 | $40,000 | +$11,637 | $51,637 |
| Year 6 | $46,000 | +$16,148 | $62,148 |
| Year 7 | $52,000 | +$21,531 | $73,531 |
| Year 8 | $58,000 | +$27,859 | $85,859 |
| Year 9 | $64,000 | +$35,210 | $99,210 |
| Year 10 | $70,000 | +$43,669 | $113,669 |
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The Time Value of Money
Future Value (FV) answers the most important financial question: "How much will my money be worth in X years?" It accounts for the time value of money—the principle that $1 today is worth more than $1 tomorrow because it can earn interest.
This calculator combines lump sum growth with periodic contributions, adjusts for inflation, and helps you plan for retirement, education, home purchases, and more.
The Future Value Formulas
FV = PV × (1 + r)^nFV = PMT × [((1 + r)^n - 1) / r]Example: $10,000 initial + $500/month for 10 years at 8%:
Lump sum grows to: $21,589 | Contributions grow to: $91,473
Total: $113,062 (invested only $70,000!)
Common Financial Goals
| Goal | Timeline | Target FV | Rate | Monthly Need |
|---|---|---|---|---|
| Emergency Fund | 2-3 years | $15,000 | 4% | $400/mo |
| House Down Payment | 5 years | $60,000 | 6% | $860/mo |
| Child's Education | 18 years | $200,000 | 7% | $460/mo |
| Retirement (30 yrs) | 30 years | $1,500,000 | 8% | $1,000/mo |
* Starting from $0. Lower monthly amount needed if you have initial savings.
Key Concepts
Compound Interest
"Interest on interest" is the 8th wonder of the world. At 8%, $10K doubles in 9 years without adding a cent.
Inflation Erosion
At 3% inflation, $100K in 20 years will only buy what $55K buys today. Always consider "real" returns.
Regular Contributions
Small, consistent savings beat irregular lump sums. $500/month for 30 years at 8% = $745,000!
Start Early
Starting 10 years earlier can double your final amount. Time is your most valuable investment asset.
Calculator Features
Frequently Asked Questions
What is Future Value (FV) and why does it matter?
Future Value (FV) is how much a current sum of money will be worth at a future date, assuming a constant interest rate. It matters because: (1) It shows the power of compound interest—interest earning interest. (2) It helps set realistic savings goals. (3) It demonstrates the time value of money—$1 today is worth more than $1 tomorrow. (4) It's essential for retirement, education, and major purchase planning. Example: $10,000 at 8% for 10 years = $21,589—more than double without adding a cent.
What is the Future Value formula?
Two formulas combined: (1) FV of Lump Sum: FV = PV × (1 + r)^n. Where PV = present value, r = periodic rate, n = periods. (2) FV of Annuity (regular payments): FV = PMT × [((1 + r)^n - 1) / r]. Where PMT = periodic payment. Total FV = FV(lump sum) + FV(annuity). This calculator handles both, letting you start with savings AND add regular contributions.
What is the difference between Ordinary Annuity and Annuity Due?
Ordinary Annuity: Payment at END of each period. Standard for savings accounts, loan payments, most SIPs. Annuity Due: Payment at BEGINNING of each period. Used for rent, insurance premiums, lease payments. Annuity Due gives slightly higher FV because each payment earns interest for one extra period. Example at 8% for 10 years with $100/month: Ordinary: $18,295. Annuity Due: $18,583. Difference: $288 (or 1.6% more).
How does inflation affect future value?
Inflation erodes purchasing power. Your 'nominal' FV might look impressive, but 'real' value (what it can buy) is lower. Real Value = Nominal FV ÷ (1 + inflation)^years. Example: $100,000 in 20 years at 3% inflation. Real value = $100,000 ÷ (1.03)^20 = $55,368. That $100K will only buy what $55K buys today! Always calculate real returns: Real Rate = ((1 + nominal) / (1 + inflation)) - 1. This calculator shows both nominal and real values.
How much should I save for retirement?
Use the 4% rule backwards: (1) Estimate annual retirement expenses (current expenses × 80%). (2) Multiply by 25 (this is your target FV). (3) Use this calculator to see if your savings will get there. Example: Need $60,000/year in retirement. Target FV = $60,000 × 25 = $1,500,000. Starting at 30, retiring at 60, with $50,000 saved: Need ~$800/month at 8% to reach $1.5M. The earlier you start, the less you need monthly—compound interest does the heavy lifting.
Is a lump sum or regular contribution better?
Mathematically, lump sum beats regular contributions because money has more time to compound. But practically, regular contributions are more powerful because: (1) Most people don't have a lump sum available. (2) Dollar-cost averaging reduces timing risk. (3) It builds discipline—automated savings work. (4) Smaller amounts are easier to commit to. Best strategy: Invest any lump sum immediately, PLUS set up automatic monthly contributions. This calculator lets you model both together.
What interest rate should I assume?
Conservative assumptions by investment type: Savings Account: 3-4%. Bonds/Fixed Income: 4-6%. Balanced Fund: 6-8%. Index Fund (S&P 500): 7-10% (historical ~10%). Aggressive Growth: 10-12% (higher volatility). For long-term planning (10+ years), 7-8% is reasonable for a diversified portfolio. For short-term (under 5 years), use 4-5% to account for market volatility. Never assume past returns guarantee future results.
How to calculate FV for education savings (like 529)?
Education costs rise 5-6% annually—faster than general inflation. Steps: (1) Current college cost: ~$25,000/year public, ~$55,000/year private. (2) Inflate to child's college years: Cost × (1.05)^years. (3) Multiply by 4 years. (4) Use this as your target FV. Example: Child is 5, college at 18 (13 years). Current cost: $25,000/year. Future cost: $25,000 × (1.05)^13 = $47,000/year. Total needed: $47,000 × 4 = $188,000. Use our calculator to see monthly savings required.
What is the Rule of 72?
Rule of 72 estimates doubling time: Years to Double = 72 ÷ Interest Rate. Examples: 6% = 12 years to double. 8% = 9 years. 10% = 7.2 years. 12% = 6 years. Applied to FV: At 8%, $10,000 becomes ~$20,000 in 9 years, ~$40,000 in 18 years, ~$80,000 in 27 years. The rule helps set expectations without a calculator—powerful for quick mental estimates.
How do I account for taxes in future value?
Taxes reduce effective returns. Tax-adjusted rate = Nominal Rate × (1 - Tax Bracket). Example: 8% return, 25% tax bracket. After-tax rate = 8% × (1 - 0.25) = 6%. Use 6% in FV calculations for taxable accounts. Tax-advantaged accounts (401k, IRA, Roth): Use full rate since growth is tax-deferred or tax-free. Pro tip: Maximize tax-advantaged accounts first—the difference over 30 years is massive.