BCBetter Calculators

Future Value Calculator

Calculate the future value of an investment with optional regular contributions.

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Enter your values and click Calculate

How It Works

Two formulas are combined. FV of principal: P × (1 + r/n)^(n×t), where P is the starting balance, r is the annual rate as a decimal, n is the compounding frequency, and t is years. FV of contributions: PMT_period × ((1 + r/n)^(n×t) − 1) / (r/n), where PMT_period converts the monthly contribution to per-period by multiplying by 12 then dividing by n. For example, a $200 monthly contribution with quarterly compounding becomes $600 per period. The two future values are summed. When rate is zero, contributions grow linearly without compounding. Total invested = principal + (monthly contribution × 12 × years). Total growth = future value − total invested.

Examples

$10,000 initial + $200/month at 7% for 20 years
A long-term retirement-style investment with monthly compounding.
Result: Future value ~$142,000; total invested ~$58,000; growth ~$84,000.
$5,000 lump sum at 6% for 10 years, no contributions
A single lump-sum investment with annual compounding.
Result: Future value ~$8,954; total growth ~$3,954.
$0 initial + $500/month at 8% for 30 years
Starting from zero with consistent monthly contributions.
Result: Future value ~$745,000; total invested $180,000; growth ~$565,000.

Frequently Asked Questions

Does compounding frequency matter much?
At the same annual rate, more frequent compounding yields slightly more. Monthly compounding on a 7% rate gives an effective annual rate of approximately 7.23% versus exactly 7% with annual compounding. The difference is noticeable over long periods.
What annual rate should I use?
For long-term stock market investments, 7% is a commonly used real (inflation-adjusted) return estimate based on historical S&P 500 averages. For bonds or savings accounts, 4–5% is more typical. Always clarify whether your rate is nominal or inflation-adjusted.
Why is total growth larger than total invested after many years?
Compounding means each period's earnings themselves earn returns in future periods. Over 30 years at 8%, a dollar doubles roughly every 9 years. This exponential growth means the returns from earlier contributions dwarf the direct contributions by the end of the period.

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