The formula
How to calculate future value
Future value is what a sum held today grows into at a given rate over a given period. It is the building block behind every retirement projection, and the reason a delay of a few years costs so much more than it appears to.
The second output deflates the answer back into current purchasing power. A projection that ignores inflation flatters itself badly over long horizons — at 2.5%, prices roughly double every 28 years.
Fill in the following:
- Amount today
- Annual return (%)
- Years (years)
- Inflation (%) — used only for the real-terms figure
Results appear immediately — there is nothing to submit. Changing a field rewrites the link, so you can share the exact scenario you are looking at.
Where a figure is not immediately to hand — a precise interest rate, an exact balance — a reasonable estimate is a perfectly good starting point. Because every result updates instantly, refining a rough guess into the real figure once you have it takes a moment, and nothing about the calculation depends on getting it exactly right on the first attempt.
Why future value matters
Most people who look up a future value calculation already have a specific number in mind — a quote, an offer, a target — and want to check it rather than learn the theory behind it. This page is built for that: enter your own figures, see the result immediately, and change any field to see how the answer moves without redoing the arithmetic from scratch each time.
This tends to come up when comparing two concrete alternatives — two lenders, two savings products, two ways of structuring the same decision — rather than in the abstract. Run both scenarios through the same calculator with the same assumptions and the comparison becomes fair, because the only thing changing between the two results is the number you are actually trying to test.
The reason a page like this exists at all, rather than leaving the calculation to a spreadsheet or a textbook appendix, is that the formula behind future value is fiddly enough to get wrong by hand but not complicated enough to need specialist software. That middle ground — real enough maths to matter, simple enough to check instantly — is exactly what a dedicated calculator is for, and it is why the same figure recalculated here should match a careful manual calculation almost exactly.
In practice, most people arrive at a page like this one having already tried a version of the calculation by hand or in a spreadsheet, and use the calculator here to confirm it rather than replace it. That is a reasonable way to use it — the two should agree to the last decimal place if the same inputs and the same formula are used, and if they do not, the formula shown above is the one to check your own working against first.
Worked example
Take the figures the calculator starts with:
- Amount today: 20,000
- Annual return: 6 %
- Years: 15 years
- Inflation: 2.5 %
That gives:
- Future value: 47,931.16
- Value in today's money: 33,094.82
- Total gain: 27,931.16
These figures are only the calculator's own starting values, included so the working is visible rather than hidden inside the tool above. Replace them with your own numbers and the same arithmetic applies — nothing about the method changes, only the inputs feeding it.
Reading the result
The real figure is the one to plan on, because it is the only one denominated in things you can buy. A nominal £48,000 in fifteen years at 2.5% inflation buys what about £33,000 buys today.
Where this goes wrong. Applying an average annual return as though it arrived smoothly. Markets do not deliver 6% a year; they deliver a sequence that averages something like it, and the order matters once you start withdrawing.
A useful check on any unfamiliar result is to compare it against a rough mental estimate first — round the inputs to convenient numbers and see whether the calculator's answer lands in roughly the same territory. A wildly different figure usually means one of the fields was entered in the wrong unit, most often a percentage typed as a whole number where a decimal was expected, or the reverse.
Nominal is the number that will appear on the statement. Real is what it will buy, after inflation has eroded the currency. For any horizon beyond a few years, decisions should be made on the real figure.
This page handles a single lump sum. For a lump sum plus monthly deposits, use the savings goal calculator, which compounds the opening balance and the payment stream together.
The headline figure is future value. With 20,000 amount today, 6 % annual return and 15 years years, that comes to 47,931.16. Change any field and the figure moves with it.
Whenever one of the underlying figures changes — a new interest rate, a different balance, an updated term — since the result only reflects what is currently in the fields. There is no need to keep a separate record of past results; the web address for a filled-in version already carries the figures used to produce it.
Not unless a tax rate or a fee is explicitly one of the inputs above. Where it is not, the figure shown is a gross calculation, and any tax due depends on your personal circumstances and current tax rules, which are worth checking separately.
The arithmetic itself is exact — the calculator applies the formula shown above precisely, with no rounding until the final figure is displayed. The uncertainty, where it exists, is entirely in the inputs: an estimated rate or an approximate balance carries that same approximation through to the result.