What is future value?
Future value (FV) is what a sum of money today will be worth at a specified future date, assuming it grows at a given rate of return. It is the mirror image of present value: FV rolls money forward with compounding, PV discounts it back. The formula is FV = PV × (1 + r)n, where PV is the amount today, r the periodic rate and n the number of periods.
A worked example
Invest $100,000 at 8% annual compounding for 5 years: FV = 100,000 × (1.08)5 = $146,933. The same money at simple (non-compounded) interest would reach only $140,000 — the $6,933 gap is compounding, and it widens dramatically with time: at 20 years the compounded figure is $466,096 versus $260,000 simple.
Where founders and investors actually use it
FV thinking sits under most venture math: a fund underwriting a seed cheque to return 10x in 8 years is implicitly solving an FV equation for the required exit value; convertible instruments accrue interest to a future conversion amount; and revenue forecasts in a model are future values of growth assumptions. The discipline is choosing r honestly — using an aspirational growth rate as if it were a contractual one is how models mislead.
What is the difference between future value and present value?
Direction. FV asks “what does today’s money become?”; present value asks “what is tomorrow’s money worth today?” Same formula, solved for the other side.
Does inflation change future value?
FV is a nominal figure. To know what it will buy, deflate it: real FV = FV ÷ (1 + inflation)n. In high-inflation environments like Türkiye’s recent past, skipping this step turns projections into fiction.
Related: present value, compounding.