To calculate the future value (FV) of a lump sum, you use the compound interest formula . You substitute the present value (PV), the interest rate per period (r), and the number of periods (n) into the formula.
Conditions: The interest rate r is assumed to remain constant over the period.; The compounding frequency matches the time unit of n (e.g., annual rate with years).; The formula assumes a single lump-sum payment rather than an annuity.
To calculate the future value (FV) of a lump sum, you use the compound interest formula . You substitute the present value (PV), the interest rate per period (r), and the number of periods (n) into the formula.
Conditions: The interest rate r is assumed to remain constant over the period.; The compounding frequency matches the time unit of n (e.g., annual rate with years).; The formula assumes a single lump-sum payment rather than an annuity.