The Future Value of $1 is amount to which $1 grows at compound interest for a given number of years at a specified interest rate. See column 1 of the compound interest tables for the factors.
To calculate the future value of a lump sum, multiply the amount of the lump sum by the factor from the appropriate compound interest table.
An appraiser has saved $10,000. How much will he have in 10 years if a reasonable return is 7% compounded monthly?
|1.||Use the monthly 7% compound interest table - FV of $1 column|
|2.||Go to the 10 year line - the factor is 2.009661|
|3.||$10,000 x 2.009661 = $20,097|