\[FV = PV(1+r)^t\]
Variables
FVfuture value
PVpresent value
rinterest rate per period
tnumber of periods
Description
What is this formula?
The future value formula calculates the value of an investment or amount of money at a future date based on a constant interest rate.
When to use it
Use this formula to estimate how much an investment will grow over time with compound growth.
Example
If 2000 USD is invested at an annual interest rate of 6% for 5 years:
FV = 2000(1 + 0.06)^5 ≈ 2676.45 USD
Applications
Investment planning, savings projections, retirement calculations, and financial forecasting.