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.
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
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.
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.