How do you calculate the future value of an investment made today?
Robert Miller
Updated on February 10, 2026
You can calculate future value with compound interest using this formula: future value = present value x (1 + interest rate)n. To calculate future value with simple interest, use this formula: future value = present value x [1 + (interest rate x time)].
How do you calculate the future value of monthly investments?
To calculate compound interest, we use this formula: FV = PV x (1 +i)^n, where:
- FV represents the future value of the investment.
- PV represents the present value of the investment.
- i represents the rate of interest earned each period.
- n represents the number of periods.
Why is future value negative?
In Excel language, if the initial cash flow is an inflow (positive), then the future value must be an outflow (negative). Therefore you must add a negative sign before the FV (and PV) function. To project a single cash flow into the future, set Payment = 0.
What is the ideal investment?
The answer is often something like this: An ideal investment would have to have the following characteristics. First, it would have to have a high return. It should have a yield high enough to outperform inflation and taxes, plus a little more. Fifteen percent per year would be about right.
How is the future value of an investment calculated?
Future Value Calculator. The future value calculator can be used to calculate the future value (FV) of an investment with given inputs of compounding periods (N), interest/yield rate (I/Y), starting amount, and periodic deposit/annuity payment per period (PMT). Future Value: $3,108.93.
How does the future value calculator calculate FV?
The future value calculator will calculate FV of the series of payments 1 through n using formula (1) to add up the individual future values. In formula (2a), payments are made at the end of the periods.
How to calculate the future value of a series?
Future Value of a Series Formula. Formula 1: A = PMT × (((1 + r/n)^(nt) – 1) ÷ (r/n)) The formula above assumes that deposits are made at the end of each period (month, year, etc). Below is a variation for deposits made at the beginning of each period: Alternative formula: A = PMT × (((1 + r/n)^(nt) – 1) ÷ (r/n)) × (1+r/n)
How to calculate future value with continuous compounding?
Calculating future value with continuous compounding, again looking at formula (8) for present value where m is the compounding per period t, t is the number of periods and r is the compounded rate with i = r/m and n = mt. The effective rate is i eff = ( 1 + ( r / m ) ) m – 1 for a rate r compounded m times per period.
