The Future Value of $1

Expected Rate of Return (After Tax)
3% 4% 5% 6% 7% 8% 9% 10%
1 $1.03 $1.04 $1.05 $1.06 $1.07 $1.08 $1.09 $1.10
2 1.06 1.08 1.10 1.12 1.14 1.17 1.19 1.21
3 1.09 1.12 1.16 1.19 1.23 1.26 1.30 1.33
4 1.13 1.17 1.22 1.26 1.31 1.36 1.41 1.46
5 1.16 1.22 1.28 1.34 1.40 1.47 1.54 1.61
10 1.34 1.48 1.63 1.79 1.97 2.16 2.37 2.59
15 1.56 1.80 2.08 2.40 2.76 3.17 3.64 4.18
20 1.81 2.19 2.65 3.21 3.87 4.67 5.60 6.73
25 2.09 2.67 3.39 4.29 5.43 6.85 8.62 10.84
30 2.43 3.24 4.32 5.74 7.61 10.06 13.27 17.45






Monthly Investment Needed to Save $100 within a Certain Period

Yeaars Expected Rate of Return (After Tax)
3% 4% 5% 6% 7% 8% 9% 10%
1 $82.19 $81.82 $81.44 $81.07 $80.69 $80.32 $79.95 $79.58
2 40.48 40.09 39.70 39.32 38.94 38.56 38.18 37.81
3 26.58 26.19 25.80 25.42 25.04 24.67 24.30 23.93
4 19.63 19.25 18.86 18.49 18.11 17.75 17.39 17.03
5 15.47 15.08 14.70 14.33 13.97 13.61 13.26 12.91
10 7.16 6.79 6.44 6.10 5.78 5.47 5.17 4.88
15 4.41 4.06 3.74 3.44 3.15 2.89 2.64 2.41
20 3.05 2.73 2.43 2.16 1.92 1.70 1.50 1.32
25 2.24 1.95 1.68 1.44 1.23 1.05 0.89 0.75
30 1.72 1.44 1.20 1.00 0.82 0.67 0.55 0.44






WORKSHEET:

Let's first look at Table 1. Ask yourself this, if you had $1 and put it in the bank at 5% for one year, how much would you have at the end (assume annual compounding)? Look at year 1 under column 5% and you would see $1.05. If you had $23,641 to invest the same way, how much would you have? Simple, just multiply $23,641 by 1.05 = $24823.05.

Now, how much would you have at 8% for 15 years? You'll find the amount is $3.17. If you had $5,000 already invested, it would have grown to $5,000 x 3.17 = $15,850.

Let's do Table 2. Assume you needed $1,000 five years from now and are willing to save monthly. How much would you need to save per month if you put it in a savings account earning 3%? (Remember the numbers are based on an after tax basis). Under year 5 and 3%, you would find the number $15.47. That's how much you would have to put away to have $1,000 in five years. What if you could earn 8% after tax. You can see that the monthly investment has dropped to $13.26.

Now let's do real life. Assume you want to buy a boat in five years for $10,000. You have $6,000 already saved and it is earning 6% after tax. How much would you have in 5 years? Look at Table 1, 5 years, column 6%. The number is 1.34. Your $6,000 would have grown to $6,000 x 1.34= $8,040.

You need $15,000; you have $8,040 so that means you will be $7,000 (rounded) short when five years are up. So go to table 2. Assuming you would earn 5% after tax on a monthly investment, look at 5 years, 5% column. It says you would need to save $14.70 per month PER THOUSAND. You need $7,000 so the amount you need to save would be $14.70 x 7= $102.90

This is the same method you use for college savings or literally anything else.