# Future Value Calculator

Future Value Calculator is equal to present value multiple to number of value 1 added  interest rate(%) power of the number of periods the money is invested.

The formula us,

FV = PV * (1 + (r) ^ n

let us consider,

• FV – future value
• PV – present value (the initial balance of your investment)
• r – interest rate (expressed on an annual basis)
• n – the number of periods (years) the money is invested for.

This formula is applied to investments in which the compounding period is the same as the period for which the interest rate is calculated.

FV = PV * (1 + r / k) ^ (n * k)

let us consider,

• k – the compounding frequency (the number of times the interest is compounded per year).

Example 1 – Calculating the future value

Single deposit of \$2,000. The annual interest rate is 5% and it is compounded yearly. What is the future value of this investment after 3 years?

FV = PV * (1 + (r) ^ n

FV = \$2,000 * (1 + 0.05) ^ 3  = \$2,315.25

The value of your deposit after 3 years (the future value) is \$2,315.25

## Example 2- Calculating the present value

The deposit to grow to \$7,000 at the end of 5 years.The annual interest rate compounded annually is 2%, calculate the present value of the deposit. Invest today in order to have

\$7,000 after 5 years?

The Formula us,

FV = PV * (1 + r) ^ n

So,

PV = FV / (1 + r) ^ n

PV = \$7,000 / (1 + 0.02) ^ 5

The answer is Present value = \$7,000