The worth of something you own isn't always the same. It changes because of things like inflation and the profits it brings in. Inflation slowly reduces its value, but the profits you make add to it. Usually, you earn more from your assets than what inflation takes away, so it grows over time. To figure out how much it will grow, you can use a future value calculator. This helps individuals and businesses know how much their assets will be worth in the future.
A future value calculator is a tool that predicts how much your money will grow over time if you invest it. It helps you see what your investment will be worth in the future.
The future value calculator helps you figure out how much your savings will grow over time. It takes into account the amount you regularly deposit, the interest rate, and how many years you plan to save for:
A = PMT ((1+r/n)^nt – 1) / (r/n))
where:
A = Future Value of the Investment
PMT = Payment amount for each period
n = Number of compounds per period
t = Number of periods the money is invested
Following are some of the advantages of using future value calculator:
Future value is the value of an investment or cash flow at a specified date in the future, based on a certain rate of return or interest rate.
Future value can be calculated using the formula: A = PMT ((1+r/n)^nt – 1) / (r/n)), where A is Future Value of the Investment, PMT is Payment amount for each period, n is Number of compounds per period, and t is Number of periods the money is invested.
Future value helps individuals and investors determine the potential growth of their investments over time, allowing them to make informed financial decisions.
The main factors that influence future value include the initial investment amount (present value), the interest rate or rate of return, and the time period for which the investment grows.
It's advisable to review future value calculations periodically, especially when there are changes in investment strategies, interest rates, or financial goals.
