# Future Value Calculator

Future value refers to the value of money at a future date.

## Future value in Detail

Suppose you won a lottery of £10,000, and you were given two options to take that money. Option 1 is to take the money today, and option 2 is to collect the money after 5 years. Not surprisingly, you will choose to collect the money today. If you collect the money today, you can invest it and earn interest on it, and you will get a higher amount after 5 years.

**Example 1:** At an annual interest rate of 5%, the future value of £10,000 after 5 years will be £12,782.82. Whereas if you choose to take the money after 5 years, the future value of the amount will be £10,000 after 5 years, because the money has not grown.

Future value is an important concept in the world of investments. Anybody who is making regular investments in a particular instrument would like to know the value of the investment after a specific period.

**Example 2:** You are investing £5,000 in bonds every year for the next 10 years. Additionally, you are investing £500 every year for 10 years. Assuming an interest rate of 4%, the future value of your investment after 10 years will be £13,404.27.

Future value is also useful for those who want to make a purchase or an investment at a future date.

**Example 3:** You want to buy a property in London after 5 years. Taking the current property prices and assume a standard rate of increase (based on historic growth), you can calculate the approximate future value of the property after 5 years. This way you can plan your savings in such a way that you have the target amount after 5 years.

In 2015, the average price of a house in London is £451,194. Assuming property prices are expected to grow at 6%, the future value of this house after 5 years is £603,800. In order to buy this home, you need to have adequate savings to match the price after 5 years and not the present price. You will require at least 5% of the property amount as deposit before you apply for a mortgage. So, you need to have savings of at least £30,190 for the deposit.

### Calculation of future value

We look at the values that are essential for calculating future value.

Present value: This is the value of money at the present time. In example 1, the present value is £10,000. In example 3, the present value is £451,194.

Annual interest rate: This metric can influence the future value in a big way. A higher annual interest rate will mean a higher future value.

Payment amount: This amount is relevant when you are making payments at regular intervals, and you want to know the value of these payments at a future date. Like in example 2, you are making payments of £500 every year, so this will be the payment amount.

Number of payments (years/months): The future value is influenced by the number of payments made and their frequency. The higher the number of payments, the greater will be the future value.

Payment frequency: This refers to the frequency of payments, which can be monthly, quarterly, 6 monthly or yearly. A higher payment frequency will result in a higher future value.

## Conclusion

Future value is a very important concept in the world of business and finance. To calculate the future value, you can try out our future value calculator.

## Popular Finance Calculators

People who read 'Future Value Calculator | Finance Calculators by iCalculator' also viewed the following finance guides and finance calculators:

### Finance and Tax Calculators

- Debt Payoff Calculator
- Credit Card Calculator: Fixed V's Minimum Payment
- Credit Card Repayment Calculator
- Payday Loan Calculator
- Loan Calculator
- Early Repayment Loan Calculator
- Car Loan Calculator
- PCP Car Loan Calculator
- Logbook Loan Calculator
- Personal Loan Calculator

- How much can I borrow?
- Mortgage Calculator
- Early Repayment Calculator
- Mortgage Comparison Calculator
- Mortgage Discount Points Calculator
- Stamp Duty Tax Calculator
- Rental Property Calculator
*Balloon*Mortgage Calculator*Buy to Let*Mortgage Calculator*Buy to Let*Mortgage Investment Profit Calculator

- Household Electrical Consumption Calculator
- Savings and Debt Comparison Calculator
- Household Budget Calculator
- Present Value Calculator
- Future Value Calculator
- Payments / Repayments Calculator

- Rule of 72 Calculator
- Savings Calculator (Goal Amount)
- US Treasury Bill Calculator [ T-Bill Calculator ]
- Invoice Calculator
- CAGR Calculator
- Perpetuity Calculator
- Effective Annual Rate Calculator
- Margin Calculator
- Current Ratio Calculator

- Dividends Calculator 2017/18
- Corporation Tax Calculator 2017/18
- Capital Gains Tax Calculator 2017/18
- UK Salary Calculators (PAYE Calculators)
- Landlord Income Tax (UK Only)
- US Salary Calculators (Federal Tax Calculators)
- AU Salary Calculators (Income Tax Calculators)
- JM Salary Calculators (Income Tax Calculators)
- CA Salary Calculators (Federal & Province)
- UK Employer NIC Calculator 2017 / 2018 tax year

- IR35 Status Calculator: In or Out?
- IR35 Calculators
- PAYE Calculator: Outside IR35, VAT Registered
- PAYE Calculator: Outside IR35, Non VAT Registered
- PAYE Calculator: Inside IR35, VAT Registered
- PAYE Calculator: Inside IR35, Non VAT Registered
- Employer NICS Calculator
- VAT Calculator
- Contractor Business Loan Calculator
- Profit Calculator

- Small Business Rate Relief Calculator
- VAT Calculator
- Stamp Duty Tax Calculator
- UK Salary Calculator
- United States Salary Calculator
- Canada Salary Calculator
- India Salary Calculator
- Australia Salary Calculator
- Jamaica Salary Calculator
- Singapore Salary Calculator

- Exchange Rate Calculator
- Forex Margin Calculator
- Retirement Calculator - Traditional IRA calculator
- Retirement Calculator - ROTH IRA calculator
- Retirement Comparison Calculator - ROTH and IRA
- Depreciation Comparison Calculator
- Annuity Depreciation Calculator
- Straight Line Depreciation Calculator
- Percentage (Declining Balance) Depreciation Calculator