Calculate the future value of an investment using the compound interest formula.
Enter 0 if no additional payments are made.
Projected Future Value
Understanding Future Value (FV) Calculations
The Future Value (FV) calculation is a fundamental concept in finance that determines the value of a current asset or sum of money at a specified date in the future, based on an assumed rate of growth (interest rate).
This calculator helps you estimate how much your investment will be worth over time, considering compounding interest and any additional regular contributions you might make. This is the exact logic used in Excel's FV function, providing a reliable way to forecast financial growth.
The Formula Explained
The core formula for Future Value, especially when considering periodic payments (an annuity), is often represented as:
FV = PV * (1 + r)^n + PMT * [((1 + r)^n - 1) / r]
Where:
FV is the Future Value.
PV (Present Value) is the initial lump sum amount invested.
r is the interest rate per period. For annual calculations, this is the annual interest rate divided by 100 (to convert percentage to decimal).
n is the number of periods (e.g., years).
PMT (Periodic Payment) is the amount added to the investment at the end of each period. If PMT is 0, it simplifies to the compound interest formula for a lump sum.
Important Note: In financial functions, PMT is often assumed to be paid at the end of the period. If payments are made at the beginning of the period (an annuity due), the formula is slightly different, but this calculator uses the standard end-of-period assumption for simplicity and common usage.
When to Use the Future Value Calculator
Retirement Planning: Estimate how much your savings and investments might grow by retirement.
Goal Setting: Determine how long it will take to reach a specific financial target, like a down payment for a house or a child's education fund.
Investment Analysis: Compare the potential returns of different investment options over various time horizons.
Loan Payoff Strategies: While this calculator focuses on growth, understanding FV helps in understanding how loans accrue interest over time if payments are insufficient.
Example Scenario
Let's say you invest an initial amount of $5,000 (PV) into an account that earns an average annual interest rate of 7% (r). You plan to leave it for 20 years (n) and make no additional periodic payments (PMT = 0).
Using the formula: FV = 5000 * (1 + 0.07)^20
This would result in a future value of approximately $19,348.42.
Now, consider another scenario: You invest an initial $10,000 (PV) at an annual rate of 6% (r) for 15 years (n). You also decide to add $100 (PMT) at the end of each year.
This scenario results in a future value of approximately $26,293.18.
function calculateFutureValue() {
var presentValue = parseFloat(document.getElementById("presentValue").value);
var annualRatePercent = parseFloat(document.getElementById("annualRate").value);
var periods = parseFloat(document.getElementById("periods").value);
var periodicPayment = parseFloat(document.getElementById("periodicPayment").value);
var resultDiv = document.getElementById("result");
var resultValueSpan = document.getElementById("result-value");
// Clear previous results and error messages
resultDiv.style.display = 'none';
resultValueSpan.textContent = ";
// Input validation
if (isNaN(presentValue) || isNaN(annualRatePercent) || isNaN(periods) || isNaN(periodicPayment)) {
alert("Please enter valid numbers for all fields.");
return;
}
if (presentValue < 0 || annualRatePercent < 0 || periods < 0 || periodicPayment 0) {
// Check for r = 0 case to avoid division by zero, though rate is typically > 0 for FV
if (annualRateDecimal === 0) {
fv = presentValue + (periodicPayment * periods);
} else {
fv = presentValue * r_n + periodicPayment * ((r_n – 1) / annualRateDecimal);
}
} else {
// Simple compound interest calculation if no periodic payments
fv = presentValue * r_n;
}
// Format the result to two decimal places and add currency symbol
resultValueSpan.textContent = '$' + fv.toFixed(2);
resultDiv.style.display = 'block';
}