A Comprehensive Guide on Future Value Calculator

To calculate the future value of an investment, one has to consider a series of regular deposits at a specific rate of interest and number of years.

Here, one can use a standard formula of the same; read on.

A = PMT ((1+r/n)^nt – 1) / (r/n))

Note: This formula works on the basis of deposits made at the end of each month or year.

Let’s decode the variables present in this formula,

• A = Future Value of the Investment
• n = Number of compounds per period
• t = Number of periods the money is invested
• PMT = Payment amount for each period

There is another formula that works on the basis of deposits made at the beginning of each month or year.

A = PMT (((1 + r/n)^(nt) – 1) / (r/n)) * (1+r/n)

Now that individuals know the formula, let’s learn how it works in a calculator.

The Future Value Calculator functions with a set formula. Let’s understand this with an example,

Suppose Mr Roy deposits ₹ 10,000 per month (here, the deposit is made at the end of each month) at an interest rate of 8%, which compounds monthly. (Here, compounding occurs at 12 compounds per period). To calculate the worth of that investment after 10 years of time, Mr Roy has to enter the data in the calculator.