Future Value

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Definition: Future Value

Future value is the value of a certain sum of money or asset at a specified time in future. It is  calculated using the present value and is a measure of how much the amount of money will be worth in future. The future value depends on the interest rates or rate of return.

Generally, the future value is an indicator of the nominal value as it doesn’t account for inflation.

Future value = Present value (1 + rate) ^ no of years

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