Future Value
Accounting glossary · Understand, connect, apply
Future value is the amount that a present sum or a series of payments grows to at a specified future date under stated interest and compounding assumptions.
Example
Investing 2,000 for three years at 5% annually produces 2,000 × 1.05³ = 2,315.25 if interest is retained and the rate does not change.
Formula and assumptions
Future value of one sum = present amount × (1 + rate) raised to the number of periods
Remember the difference
Check whether the problem uses simple or compound interest, and when deposits occur. A projected future value does not account for fees, tax or investment risk unless those are explicitly included.
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Published 4 November 2026. Prepared with AI assistance; examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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