Future value calculator
The Invezz future value (FV) calculator lets you calculate the future value of an investment (or asset) based on multiple different pieces of information. Keep reading to see how our future value calculator works, and which inputs you need to calculate future value.
How to use our future value calculator
To use our future value calculator, just follow these steps:
- Enter in the starting amount, as expressed by the value of the asset or investment at the time that you acquired it.
- Enter in the number of periods in which value compounding occurs (for instance if the value compounds once a month and you want to know the future value of an investment a year from now, you would set your compounding period to monthly, the type in 12 for the number of months/periods).
- Enter in the annual interest rate (I/Y), which shows how much the value of your asset or investment will increase in a year, as expressed by percentage. For example, a £10,000 investment with a 5% interest rate would have a future value of £10,500 a year from now.
- Enter in the periodic payment amount (PMT). For example, if you plan to contribute £100 per month to grow the value of your investment, you would type in £100 in this field.
- Hit calculate to learn the future value of your investment.
How the future value calculator works
The future value calculator determines the future value of an asset or investment, based on a number of variables, which can vary depending on how your investment works. Some FV calculations will include a periodic payment amount, in which you’re adding to your position on a regular basis. If you simply plan to buy and hold your investment without adding to it, you would avoid including the PMT in your calculation.
Why should I use it?
A future value calculator can be highly useful if you want to know where you stand financially at a future date. For instance, let’s say the FV of a £25,000 investment you buy today is projected to be £30,000 three years from now. You’re thinking about graduating from renting a flat to buying a home three years from now, with £300,000 as your target purchase price.
If you can peg the future value of your investment at £30,000, and you need a 20% down payment (£60,000) to make that home purchase three years from now, then you’ll know that you’ll already be halfway there.
What is future value?
Future value is the value of an asset or investment at a given point in time in the future. While future value can be difficult to impossible to predict in the case of owning, say, a stock or Bitcoin, it’s a useful tool that you can apply to fixed-income investments, such as a bond.