Enter the present value (amount invested) and a nominal annual interest rate.
Date Math: If you change either date, the number of days between the two dates will be calculated. If you enter a positive number of days, the end date will be updated. If you enter a negative number of days the start date will be updated.
The above means you can calculate the FV for a specific number of days and not worry about what the dates are. If you need to know the FV after 31 days, then enter 31 for the number of days and don't worry about the dates.
Set the compounding and the days per year. Click "Calc". The future value is calculated (initial amount plus the gain).
The gain may be calculated based on a unit of time, say a month. In that case, a month's gain is always the same for the same annual rate and same principal balance regardless of the length of the month. Given $10,000 principal and an annual rate of 6.75% the gain will be the same for February as it will be March.
This calculator calculates the future value (FV) of a single amount (PV). If you want to calculate the future value of a series of cash flows (deposits), then see our future value schedule, which is one of the over 40 financial calculators included in SolveIT!.
The amount that you start with is known as the present value (PV). The calculator calculates the gain or the interest earned and adds it to the PV to arrive at the future value (FV).
You can use this calculator to compare different rates of return at different compounding frequencies to determine the most advantageous option.
Please click on the above "Help" button for details.
If you have $1,000, and rather than spend it, you decide to invest it, you trust that at the end of the term, your investment will be worth more than $1,000. How much will be available at the end of the term? That depends on the interest rate or the return on the investment, how long it is invested and the frequency of compounding, if any. A future value calculator considers all of these variables and possibly more, and tells you the value of your investment at the end of the term — the future value. The "term" is the period from the start date to the end date, inclusive.
FV formula to use when your investment is compounding:
Future Value = PV * ((1 + Rate/Periods Per Year/100)Periods)
FV formula to use when your investment is earning simple interest:
Future Value = PV + (PV * (Rate/Days In Year/100) * Days)
PV is the initial amount invested.
Rate is the interest rate or the expected annual rate of return expressed as a percentage.
Periods Per Year is the number of compounding periods in a year
Periods is the number of periods in the term. If the investment is compounding annually and it is invested for two years, the periods would be 2.
The simple interest formula uses days, though it could easily be converted to periods. But since there is no compounding, it is easier to use days than to count periods and then account for a fractional period if the term happens not to be an even number of periods.
Assume you have $10,000 that you want to invest. You time frame is medium term. That is, you know you don't expect to need the money for several years. You decide to invest in a 5 year CD (certificate of deposit). At the time this is being writen, five year CDs pay interest at a rate of 1.64% compounded daily. Using the above FV formula when there is compounding, we get this result:
$10,855.03 = $10,000 * (1+0.0000449315)1826
The periodic rate, 0.0000449315, is calculated this way:
1.64% / 365 / 100
1,826 is the number of periods, in this case, the number of days. Five years times 365 plus 1 for one leap year.
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Time Value of Money