Future Value of Cash Flow calculates the worth of an initial sum, considering an interest rate over a specified period. It quantifies how an investment grows over time. For example, $1,000 invested for 5 years at a 6% annual interest rate would yield a future value of $1,300.
Future Value of Cash Flow is a financial concept used to determine the value of an investment or sum of money at a specified point in the future. It takes into account factors like the initial amount, interest rate, and time period to estimate how the investment will grow over time.
Future Value of Cash Flow Calculator
Future Value:
| Initial Investment | Interest Rate | Time Period (Years) | Future Value (FV) |
|---|---|---|---|
| $1,000 | 5% | 5 | $1,250 |
| $1,000 | 5% | 10 | $1,500 |
| $1,000 | 5% | 20 | $2,000 |
| $1,000 | 10% | 5 | $1,500 |
| $1,000 | 10% | 10 | $2,000 |
| $1,000 | 10% | 20 | $3,000 |
| $1,000 | 20% | 5 | $2,000 |
| $1,000 | 20% | 10 | $3,000 |
| $1,000 | 20% | 20 | $6,000 |
FAQs
Q: What is the future value of $1,000 after 5 years at 8% per year? A: The future value would be approximately $1,469.68.
Q: How do you calculate future value of cash flows in Excel? A: In Excel, you can use the FV function: =FV(rate, nper, pmt, [pv], [type]). Rate is the interest rate, nper is the number of periods, pmt is the payment per period, pv is the present value, and type specifies payment timing.
Q: What is future value in simple cash flow? A: Future value in simple cash flow represents the value of a cash flow or investment at a future point, considering a fixed interest rate, without compounding.
Q: What is the difference between NPV and FV? A: NPV calculates the present value of cash flows to evaluate investment profitability, while FV calculates the future value of cash flows without considering their timing.
Q: What will $10,000 be worth in 30 years? A: It depends on the interest rate. For example, at a 5% annual rate, it would be worth approximately $43,219.38.
Q: What would the future value of $100 be after 5 years at 10% simple interest? A: The future value would be $150.
Q: What is the formula for the FV function? A: The formula for the FV function in Excel is =FV(rate, nper, pmt, [pv], [type]).
Q: What is the present value of $10,000 to be required after 5 years? A: The present value would be approximately $7,511.81 at a 6% discount rate.
Q: What is the Rule of 69? A: The “Rule of 69” is not a recognized financial rule. It might be confused with the “Rule of 72” for estimating doubling time.
Q: What is an example of a future value? A: An example is estimating how much an investment of $5,000 will be worth in 10 years at a 7% annual interest rate.
Q: What is NPV in Excel for dummies? A: NPV in Excel is calculated using the NPV function: =NPV(rate, value1, [value2], ...). It helps evaluate the net present value of a series of cash flows.
Q: Should I use NPV or PV? A: Use PV to find the current value of future cash flows, and use NPV to assess investment profitability considering cash flow timing.
Q: When should I use PV instead of NPV? A: Use PV when you need the current value of a single cash flow, and use NPV when evaluating the profitability of a series of cash flows.
Q: How much is $100 at 10% interest at the end of each year forever worth today? A: It’s worth $1,000 today.
Q: How long to save $1 million in 10 years? A: It depends on savings rate and interest rate. With $1,000 monthly savings and a 6% interest rate, it would take approximately 15.08 years.
Q: How much will $1,000 be worth in 20 years UK? A: At a 4% annual interest rate, it would be worth approximately $1,817.92.
Q: What is the Rule of 72 calculator? A: The Rule of 72 is a simple mental calculation to estimate doubling time. You don’t need a specific calculator; just divide 72 by the annual interest rate.
Q: What would $10,000 become in 5 years at 6% interest? A: It would become approximately $13,394.28.
Q: What will be the future value of $5,000 invested for 10 years at 10 percent compounded annually? A: It would be approximately $12,193.71.
Q: How much is $1,000 worth at the end of 2 years if the interest rate of 6% is compounded? A: It would be worth approximately $1,123.60.
Q: What is the future value of $10,000 on deposit for 2 years at 6% simple interest? A: It would be $11,200.
GEG Calculators is a comprehensive online platform that offers a wide range of calculators to cater to various needs. With over 300 calculators covering finance, health, science, mathematics, and more, GEG Calculators provides users with accurate and convenient tools for everyday calculations. The website’s user-friendly interface ensures easy navigation and accessibility, making it suitable for people from all walks of life. Whether it’s financial planning, health assessments, or educational purposes, GEG Calculators has a calculator to suit every requirement. With its reliable and up-to-date calculations, GEG Calculators has become a go-to resource for individuals, professionals, and students seeking quick and precise results for their calculations.