Future Value Calculator
See how your money grows over time with compound interest and regular contributions. Whether you are saving for retirement, a home, or any goal, enter your starting amount, monthly contributions, interest rate, and time horizon to see the power of compounding.
This calculator provides estimates for general informational purposes only and does not constitute financial advice. Consult a qualified financial professional before making any financial decisions.
How It Works
The future value of a lump sum growing at compound interest is:
FV (lump sum) = PV × (1 + r/m)^(m×t)
Where PV is the present value, r is the annual rate (decimal), m is compounding periods per year, and t is time in years.
The future value of regular contributions (annuity):
FV (contributions) = PMT × ((1 + r/m)^(m×t) − 1) / (r/m)
Where PMT is the periodic contribution (adjusted to match compounding frequency).
For monthly contributions with monthly compounding:
FV (contributions) = PMT × ((1 + r/12)^n − 1) / (r/12), where n = 12 × years
Total FV = FV (lump sum) + FV (contributions)
Worked example: $10,000 initial, $500/month contributions, 7% annual rate, monthly compounding, 20 years.
r/m = 7/12/100 = 0.005833, n = 240
FV (lump sum) = $10,000 × (1.005833)^240 = $10,000 × 4.0387 = $40,387
FV (contributions) = $500 × ((1.005833)^240 − 1) / 0.005833 = $500 × 524.77 = $262,385
Total FV = $40,387 + $262,385 = $302,772
Total contributions = $10,000 + ($500 × 240) = $130,000
Total interest earned = $302,772 − $130,000 = $172,772 (57% of final value)
Frequently Asked Questions
What is compound interest?
Compound interest means you earn interest on your interest, not just the original principal. Over time this creates exponential growth. The more frequently interest compounds (daily > monthly > quarterly > annually), the faster the growth — though the difference between monthly and daily is small.
How much does compounding frequency matter?
On $10,000 at 7% for 20 years: annual compounding gives $38,697; monthly gives $40,387; daily gives $40,495. The difference between monthly and daily is small (~$108). The rate and time horizon matter far more than compounding frequency.
What rate should I use for retirement savings?
A 7% nominal annual return is commonly used as a long-term stock market average (after inflation it is closer to 5%). Conservative savers might use 4–5%. The actual return will vary year to year; this calculator assumes a constant rate for illustration.
What is the Rule of 72?
Divide 72 by the annual interest rate to estimate how many years it takes to double your money. At 6%, money doubles in 72/6 = 12 years. At 9%, it doubles in 8 years. This is a quick mental math approximation of the full compound interest formula.
Does inflation affect these projections?
Yes. If your rate is a nominal rate (e.g., stock market returns), the future value in real (inflation-adjusted) purchasing power is less. Subtract the inflation rate from your nominal rate to get an approximate real rate. At 7% nominal and 3% inflation, the real rate is roughly 4%.