Future Value of a Single Deposit Calculator
Discover how a one-time investment can flourish over the years through the magic of compounding.
Investment Details
Growth Projection
Future Value
$46,609.57
Initial Principal
$10,000.00
Total Interest Earned
$36,609.57
Understanding Compound Interest
This calculator demonstrates one of the most powerful forces in finance: compound interest. Unlike simple interest, which is calculated only on the initial principal, compound interest is calculated on the principal amount and the accumulated interest from previous periods. It's often called "interest on interest."
The formula for the future value of a single sum is:
FV = PV * (1 + r/n)^(nt)
- FV: Future Value - The total amount you will have after the investment period.
- PV: Present Value - Your initial principal amount.
- r: The annual interest rate (as a decimal).
- n: The number of times interest is compounded per year.
- t: The number of years the money is invested for.
As you can see from the chart, the growth is not linear. It accelerates over time, which is why starting to invest early can have such a dramatic impact on your long-term wealth. Even small differences in the interest rate or the length of the investment can lead to vastly different outcomes.
Year-by-Year Breakdown
| Year | Starting Balance | Interest Earned | Ending Balance |
|---|---|---|---|
| 1 | $10,000.00 | $800.00 | $10,800.00 |
| 2 | $10,800.00 | $864.00 | $11,664.00 |
| 3 | $11,664.00 | $933.12 | $12,597.12 |
| 4 | $12,597.12 | $1,007.77 | $13,604.89 |
| 5 | $13,604.89 | $1,088.39 | $14,693.28 |
| 6 | $14,693.28 | $1,175.46 | $15,868.74 |
| 7 | $15,868.74 | $1,269.50 | $17,138.24 |
| 8 | $17,138.24 | $1,371.06 | $18,509.30 |
| 9 | $18,509.30 | $1,480.74 | $19,990.05 |
| 10 | $19,990.05 | $1,599.20 | $21,589.25 |
| 11 | $21,589.25 | $1,727.14 | $23,316.39 |
| 12 | $23,316.39 | $1,865.31 | $25,181.70 |
| 13 | $25,181.70 | $2,014.54 | $27,196.24 |
| 14 | $27,196.24 | $2,175.70 | $29,371.94 |
| 15 | $29,371.94 | $2,349.75 | $31,721.69 |
| 16 | $31,721.69 | $2,537.74 | $34,259.43 |
| 17 | $34,259.43 | $2,740.75 | $37,000.18 |
| 18 | $37,000.18 | $2,960.01 | $39,960.19 |
| 19 | $39,960.19 | $3,196.82 | $43,157.01 |
| 20 | $43,157.01 | $3,452.56 | $46,609.57 |
Frequently Asked Questions
What is the 'Rule of 72'?
The Rule of 72 is a quick mental math shortcut to estimate the number of years required to double your money at a fixed annual rate of return. Simply divide 72 by your annual interest rate. For example, at an 8% annual return, your money would double approximately every 9 years (72 / 8 = 9). It provides a rough estimate but is very useful for quick comparisons.
How does inflation affect my future value?
Inflation erodes the purchasing power of money over time. The future value calculated here is the nominal value. To find the real value (its value in today's dollars), you would need to discount the future value by the expected rate of inflation. For a true measure of growth, your investment's rate of return must be higher than the inflation rate.
Is this calculator suitable for planning my retirement?
This tool is excellent for understanding the growth of a single lump-sum investment, like a 401(k) rollover or an inheritance. However, comprehensive retirement planning usually involves regular contributions over many years. For that, our Future Value of an Annuity Calculator is a more appropriate tool, as it is designed for scenarios with ongoing payments.