What is future value?
Future value (FV) is the value of a current asset at a specified future date based on an assumed rate of growth. It is the central concept in investment planning: a rupee invested today is worth more than a rupee received today because it can earn returns over time. Understanding FV allows you to project whether your current savings trajectory will meet your financial goals.
In practice, FV calculations underpin every long-term financial decision in India — from estimating the maturity of a Rs. 5,000 monthly SIP over 20 years (’49.9 Lakh at 12%) to projecting the growth of a Rs. 10 Lakh lumpsum over the same period (’96.5 Lakh at 12%). Without FV, there is no reliable way to evaluate whether a savings plan is adequate.
The future value formula
This calculator applies two formulas to handle both lumpsum and SIP investments:
Compounding frequency matters
This calculator uses monthly compounding, which reflects how SIPs and most mutual fund investments work in practice. Monthly compounding produces a slightly higher FV than annual compounding because returns are reinvested more frequently. The difference compounds significantly over long periods — a ’10 Lakh investment at 12% over 20 years yields ’96.5 Lakh with monthly compounding versus ’89.8 Lakh with annual compounding, a difference of over ’6.7 Lakh.