What is the Future Value?
Future value projects what money today, plus any regular contributions, becomes after compounding. It is the single most useful calculation in personal finance.
The critical companion figure is the real value — the future amount adjusted for inflation. A large nominal number can be far less impressive once you see what it actually buys.
Formula & worked example
Real value = FV / (1 + inflation)years
Worked example: 25,000 today plus 500 a month for 25 years at 7% grows to about 548,000. You contributed 175,000, so 373,000 came from growth. But at 3% inflation, that 548,000 buys only about 262,000 in today's terms — which is the number that actually matters.
How to use this future value calculator
- Enter your current amount and monthly contribution.
- Use a realistic return — 6–8% for diversified equity, 3–5% for balanced.
- Set the time horizon.
- Always check the real value column, not just the nominal figure.
Smart tips
- Always look at the inflation-adjusted figure. Nominal projections over 30 years are misleadingly large.
- Time matters more than amount: 500 a month for 30 years beats 1,000 a month for 15.
- Small return differences compound enormously — 6% versus 8% over 25 years changes the result by roughly 40%.
- Include fees in your return assumption; a 1% fee is a 1% lower return every single year.
- Increase contributions with income growth to keep pace with inflation.
Frequently asked questions
What is future value?
The projected worth of a present amount plus contributions after compounding at a given rate over a set period.
Should I use nominal or real returns?
Both. Nominal shows the account balance; real shows what it will actually buy. Plan using real values.
What return should I assume?
6–8% nominal for a diversified equity portfolio over decades, or 4–5% real after inflation.
Why does starting early matter so much?
Because compounding is exponential. The final years contribute far more than the early ones, so every year of delay costs disproportionately.
Want the theory behind the numbers? Read our finance basics on the Money Blog.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 8 Sep 2026. How we check these numbers.