1. What is the Future Value Calculation?

The Future Value calculation helps you determine how much your savings or investment will grow over time, considering compound interest and regular contributions.

2. How Does the Calculator Work?

The calculator uses the Future Value formula:

Where:

• \( FV \) — Future Value (USD)
• \( PV \) — Present Value or initial amount (USD)
• \( r \) — Interest rate per period (decimal)
• \( n \) — Number of periods (unitless)
• \( PMT \) — Regular payment amount (USD)

Explanation: The first part calculates growth of initial investment, the second part calculates growth of regular contributions.

3. Importance of Savings Calculation

Details: Understanding future value helps in financial planning, retirement savings, and investment decisions by showing how money grows over time.

4. Using the Calculator

Tips: Enter present value in USD, interest rate as decimal (e.g., 0.05 for 5%), number of periods, and regular payment amount in USD.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between simple and compound interest?
A: Simple interest is calculated only on principal, while compound interest is calculated on principal plus accumulated interest.

Q2: How often should interest be compounded?
A: More frequent compounding (monthly vs. annually) yields higher returns. This calculator assumes compounding matches payment frequency.

Q3: What are typical values for interest rates?
A: Savings accounts typically offer 0.01-0.05, while investments may offer higher returns with more risk.

Q4: Can I use this for retirement planning?
A: Yes, this is useful for estimating retirement savings growth with regular contributions.

Q5: What if I make irregular payments?
A: This calculator assumes regular, equal payments. For irregular payments, each would need separate calculation.