What is the difference between future value and present value?

Future value asks: what will $X today be worth in Y years? Present value asks the reverse: what is $X in Y years worth today? They are two sides of the same time-value-of-money equation, related by: PV = FV ÷ (1+r)^n.

How does compounding frequency affect future value?

More frequent compounding = higher future value. $10,000 at 8%/yr for 20 years: annually = $46,610; monthly = $49,268; daily = $49,530. Monthly compounding accounts for the majority of the benefit over annual compounding.

● Time value of money

Future Value Calculator

Q: What is future value?

Future value (FV) is the value of a current asset at a future date, assuming a specified rate of growth. FV = PV × (1+r)^n for lump sums, or FV = PMT × [(1+r)^n − 1]/r for regular payments (annuity).

Q: What return rate should I use for stocks?

The S&P 500 has returned approximately 10% nominal (7% real, after inflation) per year on average since 1926. For planning, 6–8% real is a commonly used conservative-to-moderate assumption for a diversified equity portfolio.

What will your money be worth in the future? Enter any amount and rate — see the year-by-year growth table.

$10,000 invested at 8% per year doubles to $21,589 in 10 years, and grows to $46,610 in 20 years thanks to compound interest. Add a $200/month contribution and 20-year total reaches $167,072. This is the power of time in investing.

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Future Value Calculator

Present value · Monthly contribution · Rate · Years

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Inputs

Present value (initial amount)

Monthly contribution (0 for lump sum only)

Annual interest rate

Years

years

Compounding

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Results

Future value of initial amount

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Future value of contributions

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Total interest / gains earned

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Total contributed

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Total future value

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Year-by-year growth

Year	Balance	Interest earned	Total contributed

How it's calculated

Future value formulas

Future value is what a sum of money will be worth at a specific point in the future, once it has grown at a given rate of return. It answers the most basic planning question in investing: if I put money in today and leave it to compound, how much will I have later? Because growth builds on previous growth, the curve is exponential — the longer the horizon, the more dramatic the final number.

The calculator handles two engines and adds them together. The lump-sum part takes your present value and multiplies it by the growth factor (1 + r/n) raised to the number of periods, so a single deposit keeps compounding untouched. The monthly-contribution part is an annuity: each deposit you add along the way compounds for the time that remains, and early contributions earn far more than later ones. Set the contribution to zero to model a pure lump sum, or set the present value to zero to model a savings plan from scratch.

Compounding frequency changes how often interest is added back to the balance. More frequent compounding (monthly or daily rather than annual) raises the final figure, though at typical rates most of the benefit comes from moving to monthly — daily adds very little beyond that. To interpret the result, compare the total future value against everything you actually put in: the gap between them is the interest your money earned on its own. Remember these are nominal figures, before tax and inflation, so the real purchasing power of the final amount will be lower.

Lump sum: FV = PV × (1 + r/n)^(n×t) Annuity (contributions): FV = PMT × [(1 + r/n)^(n×t) − 1] / (r/n) Total FV = Lump sum FV + Annuity FV Where r = annual rate, n = compounding periods/yr, t = years

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Future value of the initial amount
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Future value of contributions
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Total you put in
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Total future value
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Present value (PV): The amount you have or invest today — the starting point that the calculation grows forward in time.
Future value (FV): What that money is worth at the end of the period, after compounding at the chosen rate.
Compounding frequency: How often interest is added back to the balance (annual, monthly, daily). More frequent compounding produces a slightly higher future value.
Annuity: A series of equal, regular contributions. Each deposit compounds for the time remaining, so earlier ones grow the most.

Disclaimer: assumes constant rate. Actual investment returns vary. Past performance does not guarantee future results.

Frequently asked questions

What is future value?

Future value is the value of money at a specified future point, assuming a given rate of compound growth. It answers: "If I invest $X today at Y% per year, how much will I have in Z years?"

Does compounding frequency matter much?

At typical investment rates (5–10%), the difference between monthly and annual compounding is meaningful but modest — about 0.3–0.5% additional return per year. Daily vs monthly is negligible. The rate and time horizon matter far more than compounding frequency.

What return rate should I use for stocks?

Historical average: S&P 500 ≈ 10% nominal, 7% real (after inflation). For conservative planning: 5–7% real. For more aggressive scenarios: 8–10% nominal. Always distinguish nominal (including inflation) vs real (after inflation) returns.