Future Value

Future value is the predicted value of an asset at a specific time in the future, given its present value today. The equation for computing future value is:

FV = PV x (1 + R)^n


FV = future value

PV = present value

R = assumed interest rate

n = number of years into future

For example, if you own a house that is worth $100,000 today and you think it will increase in value at 4% a year over the next 10 years, its future value in 10 years will be:

FV = 100,000 x (1 + .04)^10 = $148,024