What is future value?

Future value is the amount of money an investment will be worth after a specific period of time if permitted to grow at a certain interest rate. It is an important idea to comprehend in order to make informed decisions regarding saving, investing, and retirement planning.

What is a future value formula?

The future value formula is a mathematical equation used to compute the future worth of an investment or cash flow based on its present value, interest rate, and holding period. The future value formula can be expressed in several different ways, but the most common form is:

What is the future value of an asset?

The future value of an asset depends on the type of investment. The future value formula assumes a stable growth rate. If money is placed in a savings account with a guaranteed interest rate, then the future value is easy to determine accurately.