Future Value

Future value (FV) is the amount of money an investment or savings will grow to over a certain period of time, based on a specific interest rate or rate of return. It accounts for the compounding effect, meaning you earn interest not only on your original money but also on the interest previously earned. For example, saving money in a bank account or investing in stocks can increase in value over time due to interest or growth. FV helps you estimate how much your current money will be worth in the future, aiding in planning for goals like retirement or large purchases.