How future value works
Future value translates a sum of money today into what it will be worth later, after earning a return period after period. The starting amount compounds on its own, and every contribution you make compounds for the time it has left until the end date. The two biggest levers are therate and the number of periods — and because growth compounds, time tends to do more of the heavy lifting than most people expect.
The future value formula
FV = PV × (1 + r)n + PMT × [((1 + r)n − 1) / r]
where PV = the lump sum you start with, r = the rate per period, n = the number of periods, and PMT = the recurring contribution. The first term grows the lump sum; the second (the annuity term) grows the contribution stream. Drop the second term and you have the simple lump-sum formula.
What makes this calculator different
- Lump sum and contributions together. Model a one-time starting amount, a recurring deposit, or both at once — not just a single lump sum like most quick tools.
- Any compounding frequency. Choose how often interest compounds and your rate is converted to the matching per-period rate, so annual, monthly, or daily scenarios all stay accurate.
- Principal, contributions, and interest split out. The result shows how much of the final balance came from your starting money, how much from your deposits, and how much from compounding — so you can see exactly where the growth came from.
Frequently asked questions
What is future value (FV)?+
Future value is what a sum of money is worth at a specified date in the future, given an assumed rate of growth. Because money earns a return over time, a dollar invested today is worth more than a dollar at that future date. Future value answers the forward-looking question “what will this grow into?” — the mirror image of present value, which discounts a future amount back to today.
What is the future value formula?+
For a single lump sum the formula is FV = PV × (1 + r)^n, where PV is the amount you start with, r is the rate per period, and n is the number of periods. When you also make a regular contribution, an annuity term is added: PMT × [((1 + r)^n − 1) / r]. The two parts are summed because the lump sum compounds on its own while each contribution compounds for the time remaining until the end date.
What is the difference between future value and present value?+
Future value grows a known amount forward in time, while present value discounts a known future amount back to what it is worth today. They use the same rate but in opposite directions: FV multiplies by (1 + r)^n, and present value divides by it. Use future value to project what savings will become, and present value to judge what a future payout is worth right now.
How does compounding frequency affect future value?+
The more often interest compounds, the higher the future value, because earned interest starts earning its own interest sooner. Moving from annual to monthly compounding gives a meaningful lift; moving from daily to continuous is nearly imperceptible. To compare scenarios fairly, this calculator converts your annual rate into the matching per-period rate so the math stays consistent across frequencies.
What is the difference between an ordinary annuity and an annuity due?+
With an ordinary annuity each contribution is made at the end of the period, so it has slightly less time to grow. With an annuity due each contribution is made at the start of the period, giving every deposit one extra period of compounding. The annuity-due future value is therefore the ordinary value multiplied by (1 + r). Most savings and loan schedules assume an ordinary (end-of-period) annuity unless stated otherwise.
Disclaimer: This calculator is for educational purposes only and assumes a constant rate of return, which real markets never provide — actual returns vary year to year. It is not financial, investment, or tax advice. Consider speaking with a qualified professional before making decisions.