Future Value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The FV calculation allows investors to predict, with varying degrees of accuracy, the amount of profit that can be generated by different investments. FV calculation is based on the assumption of a stable growth rate.
The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth in the future. Knowing the future value enables investors to make sound investment decisions based on their anticipated needs
The FV calculation can be done in two ways depending on the type of interest being earned.
Simple Interest -
If an investment earns simple interest, then the Future Value (FV) formula is -
where :
Compound Interest -
The formula for the Future Value (FV) of an investment earning compounding interest is -
where :
There are various benefits of Future Value Calculator -
The whole and sole purpose of using future value calculator is that we come to know that how much amount will be accumulated in future if we invest certain amount in present for a particular period of time.
Based on your future value calculation. You can take following action and change your investment strategy. The action are as follows -
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