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Future Value Calculator, Basic

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Calculate the Futurity Value and Future Value Interest Factor (FVIF) for a present value invested for a future return. Our bones future value reckoner sets time periods to years with interest compounded daily, monthly, or yearly.

The Future Value Formula

$ FV = PV(1+i)^n $

Where:

FV = future value
PV = nowadays value
i = interest rate per menstruation in decimal grade
n = number of periods

The future value formula FV = PV*(1+i)^northward states that future value is equal to the present value multiplied by the sum of ane plus interest rate per period raised to the number of time periods.

When using this future value formula be sure that your fourth dimension period, interest rate, and compounding frequency are all in the same time unit. For case, if compounding occurs monthly the number of time periods should exist the number of months of investment, and the involvement charge per unit should be converted to a monthly interest charge per unit rather than yearly.

For more advanced hereafter value calculations see our other futurity value calculators. See the Future Value of a Dollar estimator to create a table of FVIF values.

Number of Years: Use whole numbers or decimals for partial periods such as months, and so for 7 years and half dozen months you would input seven.5 years
Interest Charge per unit (I): • The nominal interest rate or stated charge per unit as a per centum; • i = I/100 is the interest charge per unit as a decimal
Compounding: Select daily, monthly or yearly compounding
Nowadays Value (PV): Nowadays value of a sum of money to be invested
Future Value (FV): The result of the FV adding is the future value of a present value sum to be invested for some number of years at a given interest rate
FVIF: • The Future Value Interest Factor includes time menstruation, interest rate and compounding frequency. You tin can apply this factor to other nowadays value amounts to find the time to come value with the same length of investment, interest and compounding rate.; • FVIF = (1+i)ⁿ; • Multiply whatever PV by FVIF to go a future value with the same length of investment at the same interest rate.

Future Value Case Problem

The default adding in the calculator asks what is the hereafter value of a nowadays value amount of $12,487.16 invested for 3.5 years, compounded monthly at an annual interest rate of v.25%.

The calculator get-go converts the number of years and interest rate into terms of months since compounding occurs monthly in this example
- 3.5 years × 12 = 42 months
- Then due north = 42
Convert the almanac interest charge per unit of 5.25% to a monthly interest rate
- First convert the pct to a decimal: 5.25 / 100 = 0.0525
- So divide the annual charge per unit of 0.0525 by 12 to become the monthly interest rate: 0.0525 / 12 = 0.004375
- So i = 0.004375
Exercise the adding using the hereafter value formula FV = PV*(one+i)ⁿ
$ FV = PV(i+i)^due north $

$ FV = 12487.16(ane+0.004375)^{42} $

$ FV = 12487.16(1.004375)^{42} $

$ FV = 12487.16(i.201233824) $

$ FV = 15000.00 $

Future Value Interest Factor Example Trouble

Computing the Future Value Interest Factor FVIF for this same problem, FVIF = (i+i)^northward

$ FVIF = (ane+i)^n $

$ FVIF = (i+0.004375)^{42} $

$ FVIF = (1.004375)^{42} $

$ FVIF = ane.201233824 $

Use this FVIF to find the hereafter value of whatever present value with the same investment length and involvement rate. Instead of a present value of $12487.16, peradventure you desire to find the future value of a present value of $xvi,649.60.

$ FV = PV \times FVIF $

$ FV = 16,649.55 \times i.201233824 = $20,000.00 $

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