Future Value Calculator is a tool that can assist you in calculating the future value of your invested amount of money with respect to the interest amount designated to be paid along with the periodic payment at a particular time in the future.
This is a smart calculating tool that has been designed to aid you in making financial decisions, wisely. For instance, suppose, if you are required to invest some amount of money and you want to calculate the worth of the amount (that is to be received back at the end of the decided period of investment) then you can take the help of this calculator.
This calculator is quite efficient in calculating the future value of the invested money. You can use the future value of money calculator to compute the amount which is to be invested, manually as well but it is time-consuming. To efficiently and quickly calculate the FV of the present value of the money in terms of the interest rate as per the period(s) of the investment, you can rely upon this Future Value Calculator.
Before going ahead and understand the usage of this calculator, for your ease, let us throw light on some terminologies related to it in terms of the finance.
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What is Future Value?
Firstly, let us describe a key term that takes account of all these terms. The key term is Finance that at its narrower level is incorporated by Present Value, Future Value and other terms related to financial procedures or investments. Finance is basically an umbrella term that underpins various tasks and activities related to money dealings such as banking, debiting, and investments.
While investing in money, one must need to calculate the future value of the amount that is to be invested so that he can compute the worth of the invested amount in terms of the decided interest rate.
This is the basics of finance and is of our main concern here. You must be aware of the fact that if you don't compute the future value of the money that is to be invested then you may come to suffer loss. Therefore, we have designated this section to let you know the significance of the calculation of the future value, and also help you to understand this whole procedure.
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Now, let us describe the above-mentioned terms one by one so that you can get to understand this whole financial procedure.
What is Present Value?
Present Value can be referred to as the current value of the money that is to be invested. In other words, the amount of money that you want to invest or lend someone is what we call Present Value. Try present value calculator for calculating present value online.
What is Period?
A period is the period of time that ranges from the present time of the investment to the future or end time of the investment. The period basically refers to the time span or range that allows the borrower to return the invested or borrowed money to the investor/lender. A period can be a month, months, a year or years depending upon the investment deal. ROA has a deep relationship with the period, you can calculate roa from here as well.
What is Interest Rate?
The interest rate can be marked as the fixed amount of money that is to be paid along with the borrowed money. The interest amount can be incremented to the actual amount of money on a weekly, monthly, or yearly basis. In other words, the interest rate tends to increment the present value of money and is converted into the future value of money as per the period of investment.
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What is Future Value?
On the other hand, the amount of money that is to be received back after the investment period ends is called Future Value. The future value is incremented as per the interest rate (an extra amount of money to be charged due per period). If the interest rate per period doesn't change until the end of the period then the future value can be calculated using the future value formula.
You can calculate the FV manually using the formula but it's quite hectic and time taking procedure. You can use this Future Value Calculator to compute the Future Value of money that is to be invested within the second.
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How to Use Future Value Calculator?
Now, you must be aware of the application of the future value converter that this has been designed to help you in calculating the future value as per the interest rate and the period of investment (present value of money that is to be invested).
So, let's move ahead to know about the usage of the Future Value Calculator.
You can use this fv calculator quite easily to calculate future value as it only requires you to put the present value, interest rate, and the period of the investment.
For example, you have $2000 and you want to calculate the future value to know how much it will be worthy to invest this amount of money for one year. If the interest rate is 5% and is paid monthly (compounding) then the future value of the money will be $ 3,639.70.
This future value has been computed using the future value formula
$$FV = PV * (1 + r) ^ n$$
This Future Value Calculator works exactly using this formula but you aren't required to compute it the way you do manually. All you are required to do is to give the input to the calculator and get the results within a second.
On the screen of the calculator, you can see three boxes titled "Present Value", "Interest Value", and "Period", respectively. You just have to put the required values in their respective boxes and then press the Calculate button to get the results
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