Future Value Calculator – Estimate Investment Growth
Project the future value of a lump sum with optional regular deposits.
About the Future Value Calculator
What is the Future Value Calculator?
A future value calculator projects what a sum of money will grow to, with or without regular deposits, at a constant rate of return.
Why use this calculator?
Future value is the core of retirement and savings planning. It answers the question of how much a given amount becomes after compounding over time.
How to use it
- Enter the present value and expected return.
- Enter the number of years and compounding frequency.
- Add a monthly deposit if you will contribute regularly.
Formula
FV = PV(1+r)^n + PMT·((1+r)^n − 1)/r
Assumes a constant rate. Actual returns vary year to year.
Frequently Asked Questions
What is the difference between present and future value?
Future value is what today\u2019s money grows to; present value is what a future amount is worth today. They are two views of the same equation.
How does compounding frequency change the result?
More frequent compounding produces a slightly higher future value because interest is added and earns interest sooner.
What is compound interest?
Compound interest is interest earned on both your original money and on previously earned interest. Over time it can make savings grow much faster than simple interest.
What is the difference between nominal and effective return?
The nominal return ignores compounding within the year, while the effective (annualised) return accounts for it. The effective figure is usually higher and better reflects real growth.
How does inflation affect my returns?
Inflation erodes purchasing power. The real return is the nominal return minus inflation, so an investment can grow in dollars yet still lose value in what it can buy.
What rate of return should I assume?
A common long-term assumption for a diversified stock portfolio is about 6% to 8% per year after inflation, but returns vary and are never guaranteed.
Does this account for taxes and fees?
Unless stated, the tool shows pre-tax, pre-fee growth. Subtract your fund expense ratio and expected tax rate to estimate what you keep.
How much should I save each month?
A common guideline is 20% of income, but the right number depends on your goals. Work backwards from your target amount and time frame.
What is an emergency fund and how big should it be?
It is cash set aside for unexpected expenses. Most planners suggest three to six months of essential living costs.
Where should I keep short-term savings?
High-yield savings accounts and money-market funds are typical because they are liquid and low risk, even if returns are modest.