Future value (FV) is the value of a current asset at a future date. It is useful for extrapolating the expected return on an asset. The math uses an assumed rate of growth. For investors and financial planners the use is essential to estimate how much an investment made today will be worth in the future. The result of knowing future value (FV) enables investors to make sound investment decisions based on the needs of their investment policy or financial plan .
It’s important to remember the raw number is an extrapolation and economic factors, such as changes in inflation, cash flow, or return, will affect the future value of the asset by eroding its value or falsely projecting a value that is above the realized return.
How to do the Math:
![\[FutureValue=I*(1+(R*T))\]](https://investmentwithinsight.com/wp-content/uploads/eq_d2c68a46bd58deba61a3f5536ae17d30.png)
