Future Value
What a sum of money, plus any contributions, will be worth at a future date after earning a given return.
What does future value mean?
Future value compounds today’s money and future contributions forward at an assumed rate. It answers "what will this grow into?" and is the foundation of savings and investment projections.
Put it to use
Related terms
Future Value — frequently asked
How do I calculate future value?
Use FV = PV × (1 + r)^n for a lump sum: PV is today’s amount, r the periodic return, and n the number of periods. $10,000 at 7% for 20 years grows to about $38,700. Regular contributions use the annuity version of the formula.
What is the difference between future value and present value?
Future value projects what money today grows into later; present value discounts a future amount back to what it is worth today. They are inverses — one compounds forward, the other discounts backward at the same rate.