What is Future Value?
Future value is the utility of an asset or cash at a particular date in the future. It shows you how a current investment would grow in the future. It is a crucial concept as it offers you the value of your current savings in the future. By calculating this, you can know how much an investment today is worth in the future.
Future value is vital to investors and financial planners, as they need to estimate how much an investment today is worth in the future. In addition, it helps investors to make correct financial decisions based on their future goals.
Inflation is very much standard nowadays. Therefore, understanding the inflation rate is crucial in predicting the future value. It is the potential increase of rate of prices over a certain period. In other words, it is typically a broad measure such as, the overall price increase or the cost of living in a country. If you want to achieve financial goals in the future, your investment amount must beat inflation over the long term. For example, suppose you dream of buying a car or accumulating a corpus for children's higher education and marriage. Then, your future value should be higher than your current investment amount.
It is crucial for a business as well. For example, if you are thinking of investing in a new project, then it's essential to know the ROI (Return on Investment). Future value helps you to calculate the future return from the project.
What is a Future Value Calculator?
A future value calculator is an online tool that calculates the investment's future value. It shows you what will be the future value of your money. A future value calculator is an online & innovative tool that computes the value of any investment in the future.
The future value calculator consists of an input box, where you enter your present value of an investment, the annual rate of interest, and the number of years or months. The calculator will then display your investment's future value.
How do Future Value Calculators work?
This calculator smartly evaluates the future value (FV) of an investment based on your initial investment, annual interest rate (r), and the total number of years (t).
The mathematical formula for calculation of Future Value:
A = PMT ((1+r/n)^nt – 1) / (r/n))
(Formula for future value calculation is based on the idea that you have made deposits at the end of each period, such as month or year).
A = Investment Future Value PMT = Payment amount made for each year/month N = Number of compounds made per years/months T = The money invested for no. of years/months
For example, you deposit Rs 10,000 per month (The deposit is made at the end of each month) at an interest rate of 8% compounded monthly. (This is 12 compounds per period). You may calculate the value of the investment after 10 years as follows:
PMT = Rs 10,000 n = 12 (Number of compounds per period is 12 for monthly compounding) t = 10 years A = (10,000(((1+0.08/12)^(120) – 1) / (0.08/12))) A = Rs 18,29,460.
How to Use the Elearnmarkets Future Value Calculator?
If you are eager to know about your investment's future value in seconds, then use the Elearnmarkets Future Value Calculator. To use our free calculator please follow the simple steps.
- Enter your present value of investment
- Then enter the number of years for which you want to continue the investment
- Enter the annual rate of return for your investment
The Elearnmarkets Future Value Calculator displays the approximate value of your future investment .
Benefits of Elearnmarkets Future Value Calculator
The Elearnmarkets Future Value Calculator shows how much amount will be accumulated in the future if you invest a certain amount in present time.
Choose your investment amount so that it returns a higher offer value above inflation.
By using this calculator you can decide if you must increase the deposit amount, the number of times you deposit the investment & also choose your best investment option where you can get the maximum return on investment.
Elearnmarkets Future Value Calculator - Frequently Asked Questions
How easy it is to use the Elearnmarkets Future Value Calculator ?
You can use our online tool from almost anywhere & get the results within seconds.
Why do you need to calculate future values?
It refers to the value of a current asset on a future date, calculated on an assumed rate of return – which is known as the time value of money. To determine ROI, future value calculation is widely used by investors and businesses.