Future value

Future value is the amount of money that some dollar amount will grow to in the future.

• If you invest $1,000 today, it will be worth more than $1,000 three years from now (assuming you can earn a return on the investment). The estimated value of the investment three years from today is called the future value of the initial $1,000.

Future value table

The term below, taken from the formula above is called the future value factor. Using this factor, a future value table can be constructed. The table, then, can be used to solve future value questions instead of using the formula.