In general, the future value of a sum of money today is calculated by multiplying the amount of cash by a function of the expected rate of return over the expected time period. Future value works in the opposite way as discounting future cash flows to the present value.

You can calculate future value with compound interest using the formula future value = present value x (1 + interest rate)n. To calculate future value with simple interest, use this formula: future value = present value x [1 + (interest rate x time)].

The future value calculation incorporates how long the individual holds the investment, along with the interest rate. The formula varies on whether the interest rate is simple or compounded: Simple interest rate: Future value = investment amount x (1 + (interest rate x length of investment)