What future value means
Future value is what a sum of money today will be worth at a point in the future, once interest has been added. It is a core idea in finance called the time value of money: a dollar today is worth more than a dollar later, because today's dollar can earn interest in the meantime.
The future value formula
FV = PV x (1 + r/n) raised to the power of n x t, where PV is today's amount, r is the annual rate, n is how many times a year it compounds, and t is the number of years.
Worked example
Invest 1,000 today at 8% a year, compounded yearly, for 10 years. Its future value is about 2,159, meaning you earn roughly 1,159 in interest without adding anything more.
Why it matters
Future value lets you compare money across time on equal terms: whether to take a lump sum now or later, or how much a deposit today will be worth at retirement. Its mirror image is present value, which works the calculation backward.
The future value formula
Future value grows a present amount by compound interest: FV = PV × (1 + r)n, where PV is today's amount, r is the rate per period and n is the number of periods.
Worked example
$1,000 invested at 6% a year for 10 years: FV = 1000 × 1.0610 = $1,790.85.
Future value of $1
| Years | at 3% | at 6% | at 9% |
|---|---|---|---|
| 5 | $1.16 | $1.34 | $1.54 |
| 10 | $1.34 | $1.79 | $2.37 |
| 20 | $1.81 | $3.21 | $5.60 |
| 30 | $2.43 | $5.74 | $13.27 |
Frequently asked questions
What is future value?
The value a sum of money today will grow to in the future at a given interest rate, once compounding is applied.
How is this different from compound interest?
It uses the same maths. Future value is the finance term for the end result, and it pairs directly with present value for time-value-of-money problems.
What about regular contributions?
This tool grows a single lump sum. To add a fixed monthly deposit, use the investment calculator, which includes ongoing contributions.
What is the future value of $1,000 in 10 years?
At 6% a year it is $1,790.85 (1000 × 1.06 to the power of 10). At 3% it is about $1,344; at 9%, about $2,367.
What is the formula for future value?
FV = PV × (1 + r) raised to the power n, where PV is the present amount, r is the rate per period and n is the number of periods.