Future Value
Future value (FV) is a financial term used to describe the value of an asset at a future date. It is the amount of money that an asset will be worth at a specific point in time, based on a given rate of return. Future value is used to calculate the present value of an investment, which is the amount of money that must be invested today in order to achieve a certain future value. It is also used to determine the amount of money that must be saved in order to reach a certain goal in the future.
History of Future Value
The concept of future value has been around since the early days of finance. It was first used by merchants in the Middle Ages to calculate the value of goods at a future date. The concept was later adopted by economists and financial advisors to calculate the value of investments and savings. Today, future value is used by individuals, businesses, and governments to make decisions about investments, savings, and other financial matters.
Comparison Table
| Year | Future Value |
|---|---|
| 2020 | $100 |
| 2021 | $110 |
| 2022 | $121 |
| 2023 | $133 |
Summary
Future value is a financial term used to describe the value of an asset at a future date. It is used to calculate the present value of an investment, which is the amount of money that must be invested today in order to achieve a certain future value. The concept of future value has been around since the early days of finance and is used by individuals, businesses, and governments to make decisions about investments, savings, and other financial matters. For more information about future value, visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Present Value
- Discount Rate
- Compound Interest
- Annuity
- Time Value of Money
- Net Present Value
- Internal Rate of Return
- Cash Flow
- Risk-Adjusted Return
- Return on Investment
