Future Value Calculator

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

Future Value Calculator

[ No Votes ]

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.


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.

Finance Calculators

You may also find the following Finance calculators useful.