Future Value Calculator Project compound growth of investments — with lump sums, regular contributions, inflation adjustm...
Future Value Calculator
Project compound growth of investments — with lump sums, regular contributions, inflation adjustment, and 2025 benchmarks.
Lump Sum (Compound Interest)**:
$$FV = PV \times \left(1 + \frac{r}{n}\right)^{nt}$$
or (continuous): $$FV = PV \times e^{rt}$$
Where: • $PV$ = present value • $r$ = annual return • $n$ = compounding periods/yr • $t$ = years
Regular Contributions (Ordinary Annuity)**:
$$FV = PMT \times \frac{(1 + r)^t - 1}{r}$$
Growing Contributions**:
$$FV = PMT \times \frac{(1 + r)^t - (1 + g)^t}{r - g}$$
Example** ($10K lump @ 7%, 30 yrs, monthly): $$FV = 10{,}000 \times (1 + 0.07/12)^{360} = \mathbf{\$81{,}165}$$ (vs. $76,123 annual, $81,662 continuous)
⚠️ Avoid these common pitfalls:
- Nominal vs. real return confusion** — 7% return − 3% inflation = **4% real growth**
- Ignoring volatility drag** — 15% std dev reduces CAGR by ~1.1%
- Continuous compounding overuse** — great for theory, unrealistic for most accounts
- Tax omission** — 25% ordinary tax = −25% to effective return
✅ Pro Tips**:
- Use **monthly compounding** for 401(k), IRA, brokerage accounts
- Subtract inflation *after* calculating nominal FV (not from rate)
- Adjust return for taxes: e.g., 7% × (1 − 0.15) = 5.95% for LTCG assets
| Scenario | Nominal FV | Real FV (3% Infl.) |
|---|---|---|
| $10K @ 7%, 30 yrs | $76,123 | $31,222 |
| $500/mo @ 7%, 30 yrs | $566,765 | $231,322 |
| $500/mo + 3% growth | $822,110 | $335,781 |
| S&P 500 (9.8%, 30 yrs) | $163K on $10K | $66,718 |
📉 Rule of 72**:
- 7% return → doubles in **10.3 years**
- 4% real return → doubles in **18 years**
➡️ Lump Sum
“$10K invested today @ 7% for 30 yrs — what’s it worth?”
➡️ Regular Contributions
“$500/mo to my 401(k) for 30 yrs @ 7% — how much will I have?”
➡️ Growing Contributions
Auto-increase $500/mo by 3% yearly (salary growth) — see impact.
➡️ Inflation-Adjusted
Take $566K nominal FV, adjust for 3% inflation → real purchasing power.
Note: Uses exact compound formulas. Continuous mode: $FV = PV e^{rt}$. Growing annuity assumes $r \neq g$.