Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A lump sum's projected future value is extremely sensitive to the assumed rate of return, since that rate compounds every single year over the projection horizon. A modest change in the assumed rate produces a disproportionately large change in the final projected figure the longer the time horizon runs.
Before you rely on it
What to check
Test the projection across a range of plausible return assumptions rather than anchoring on a single rate, especially over a longer time horizon where the sensitivity compounds.
The common error
Where people go wrong with future value calculator
Treating a future value projection built on a single assumed return as a reliable, precise forecast. A modest change in that one assumption produces a substantially different result over a long enough horizon, and the projection is only as good as the rate assumed.
Sensitivity evidence
How annual return changes the future value
| Annual return | Future value | Growth |
|---|---|---|
| 4.0% | $29,605 | $9,605 |
| 5.0% | $32,578 | $12,578 |
| 6.0%worked example | $35,817 | $15,817 |
| 7.0% | $39,343 | $19,343 |
| 8.0% | $43,178 | $23,178 |
Every input, tested
Which input moves the future value most
| Input | Tested from | To | Future value at each end | Swing |
|---|---|---|---|---|
| Time horizon | 7.0 years | 13.0 years | $30,073 to $42,659 | $12,586 (35%) |
| Present value | $18,000 | $22,000 | $32,235 to $39,399 | $7,163 (20%) |
| Annual return | 5.0% | 7.0% | $32,578 to $39,343 | $6,765 (19%) |
Two variables at once
Future value by annual return and present value
| Annual return \ Present value | $16,000 | $20,000 | $24,000 |
|---|---|---|---|
| 4.0% | $23,684 | $29,605 | $35,526 |
| 5.0% | $26,062 | $32,578 | $39,093 |
| 6.0% | $28,654 | $35,817 | $42,980 |
| 7.0% | $31,474 | $39,343 | $47,212 |
| 8.0% | $34,543 | $43,178 | $51,814 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Present value | $20,000 |
| Annual return | 6.0% |
| Time horizon | 10.0 years |
| Future value | $35,817 |
| Growth | $15,817 |
Complete evidence
Full projection schedule
Show all 10 rows
| Period | Opening balance | Contribution | Growth | Ending balance |
|---|---|---|---|---|
| Year 1 | $20,000 | $0.00 | $1,200 | $21,200 |
| Year 2 | $21,200 | $0.00 | $1,272 | $22,472 |
| Year 3 | $22,472 | $0.00 | $1,348 | $23,820 |
| Year 4 | $23,820 | $0.00 | $1,429 | $25,250 |
| Year 5 | $25,250 | $0.00 | $1,515 | $26,765 |
| Year 6 | $26,765 | $0.00 | $1,606 | $28,370 |
| Year 7 | $28,370 | $0.00 | $1,702 | $30,073 |
| Year 8 | $30,073 | $0.00 | $1,804 | $31,877 |
| Year 9 | $31,877 | $0.00 | $1,913 | $33,790 |
| Year 10 | $33,790 | $0.00 | $2,027 | $35,817 |
Where the inputs come from
Present value is the lump sum you have or will invest today, with no further deposits. The annual return should be an honest assumption for the type of account, and the time horizon is the number of years until you need the money. If you plan to keep adding money, use the compound interest calculator instead, which includes contributions. Enter returns after fees if you want a realistic figure.
When the result stops applying
The calculation assumes one steady return and no withdrawals, taxes or fees. Real returns vary, and a single bad year early can change the result of a shorter horizon a lot. Inflation reduces what future dollars buy, so a future value should be read against expected price rises. Guaranteed products such as CDs and bonds fit the model better than stocks.
What to compare it with
Reverse the question with the present value calculator when you have a target amount in mind. Test a lower return to see the range of outcomes, and check the rule of 72 for a quick doubling estimate. If you will keep contributing, the compound interest and dollar-cost averaging calculators are the better fit.
People also ask
Frequently asked questions
What return should I assume?
Use a figure that matches where the money is. A high-yield savings account pays a few percent, bonds somewhat more, and a diversified stock fund has historically averaged more but with large swings, so a range is safer than one number.
How is future value different from present value?
Future value grows a sum forward to a later date, while present value discounts a future sum back to today. They are the same formula solved in opposite directions.
Does this account for inflation?
No. The result is in nominal dollars. To see real purchasing power, subtract the expected inflation rate from your return before running the calculation.