Future Value (FV)

Time Value of Money
Updated Apr 2026 • Has calculator

The value of a current asset at a specified future date, assuming a given rate of return.

What is Future Value?

Future value (FV) shows how much a sum of money invested today will grow to over time, given a specific interest or return rate. It is the mirror image of present value: where PV discounts the future back to today, FV compounds today forward into the future. FV is central to retirement planning — it tells you whether your current savings, compounded at an expected rate of return, will reach your target. It is also used to compare the long-run impact of different saving and investing strategies.

Formula

FV = PV × (1 + r)^n

Worked Example

Worked example — S&P 500 Index — Historical Average Return

20-year investment horizon

Step 1  Initial investment (PV): $10,000
Step 2  Average annual return: 10.5% (S&P 500 nominal, 1993–2023)
Step 3  Horizon: 20 years
Step 4  FV = $10,000 × (1.105)^20 = $10,000 × 7.366 = $73,662
Step 5  → $10,000 grows to ~$73,662 over 20 years at the S&P 500's historical average

Source: S&P Dow Jones Indices — S&P 500 Annual Returns (2024-01-31)

Calculate Future Value

Amount invested today

Expected annual growth rate

Investment horizon in years

Future Value

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Not investment advice.

How to Interpret Future Value

< 10000
Minimal Growth — low rate or short horizon
10000 – 100000
Solid Growth — compounding at work
> 100000
Strong Compounding — long horizon or high return

📚 Time Value of Money — Complete the path

  1. Present Value
  2. Future Value
  3. PV of Annuity
  4. FV of Annuity
  5. Growing Perpetuity
Sources
  1. CFA Institute — Fixed Income & Time Value of Money, 7th ed.
  2. S&P Dow Jones Indices — S&P 500