# Future Value (FV) Calculator

LAST UPDATE: September 25th, 2020

## Definition – What is a Future Value (FV)?

Future Value (FV) is the value of money (either a lump sum or a stream of payments) at a time in the future.

## FV formula – How Future Value is calculated

Future Value = Present Value x (1 + 0.022)Number of Periods

Where:

• Present Value” is a sum of money in the present.
• Rate of return” is a decimal value rate of return per period (the calculator above uses a percentage). A return of “2.2%” per year would be calculated as “0.022.”
• Number of Periods” are the number of compounding periods.

### Example

We save \$1,000 in an account that yields 2.2% interest compounded annually.

After 10 years, how much will we have saved?

Future Value = Present Value x (1 + 0.022)Number of Periods

Future Value = 1,000 x (1 + 0.022)10
Future Value = 1,000 x (1.022)10
Future Value = 1,000 x 1.24311
Future Value = 1,243.11

Therefore, the future value of the account in 10 years would be \$1,243.11.

## FAQ

### What is the difference between present value and future value?

Present value is the value of money in today’s dollars. Future value is the value of money at some point in the future.

### What is the difference between future value and future value of an annuity (or annuity due)?

Future value can be a single sum or a stream of payments (annuity).

The future value of an annuity is the FV of a stream of payments occurring at the end of the period.

The future value of an annuity due is the FV of a stream of payments occurring at the beginning of the period.

### What is the difference between future value and net future value?

Net future value (NFV) is a collection of future value calculations ending at the same time at one point in the future.

Future value (in the context of this calculator) is for only one sum of money at one point in the future.