How to Calculate and Solve for Future Worth | Simple Payment | Economic Equivalence

July 25, 2020March 31, 2024 Loveth Idoko

Last Updated on March 31, 2024

The image above represents future worth. To calculate future worth, three essential parameters are needed and these parameters are Present Amount or Worth (P), Interest Rate (i) and Number of Years (N).

The formula for calculating future worth:

F = P(1 + i)^N

Where:

F = Compound Amount or Future Worth
P = Present Amount or Worth
i = Interest Rate
N = Number of Years

Let’s solve an example;
Find the future worth when the present worth is 12, the interest rate is 0.2 and the number of years is 10.

This implies that;

P = Present Amount or Worth = 12
i = Interest Rate = 0.2
N = Number of Years = 10

F = P(1 + i)^N
F = 12(1 + 0.2)¹⁰
So, F = 12(1.2)¹⁰
F = 12(6.19)
F = 74.30

Therefore, the future worth is ₦74.30.

Calculating the Present Worth when the Future Worth, the Interest Rate and the Number of Years are Given

P = F / (1 + i)^N

Where;

P = Present Amount or Worth
F = Compound Amount or Future Worth
i = Interest Rate
N = Number of Years

Let’s solve an example;
Given that the future worth is 20, the interest rate is 0.2 and the number of years is 5. Find the present worth?

This implies that;

F = Compound Amount or Future Worth = 20
i = Interest Rate = 0.2
N = Number of Years = 5

P = F / (1 + i)^N
P =20 / (1 + 0.2)⁵
That is, P = 20 / (1.2)⁵
P = 20 / 2.48
P = 8.064

Therefore, the present worth is ₦8.064.

How to Calculate Future Worth | Simple Payment Using Nickzom Calculator

Nickzom Calculator – The Calculator Encyclopedia is capable of calculating the future worth.

To get the answer and workings of the future worth using the Nickzom Calculator – The Calculator Encyclopedia. First, you need to obtain the app.

You can get this app via any of these means:

Web – https://www.nickzom.org/calculator-plus

To get access to the professional version via web, you need to register and subscribe for NGN 1,500 per annum to have utter access to all functionalities.
You can also try the demo version via https://www.nickzom.org/calculator

Android (Paid) – https://play.google.com/store/apps/details?id=org.nickzom.nickzomcalculator
Android (Free) – https://play.google.com/store/apps/details?id=com.nickzom.nickzomcalculator
Apple (Paid) – https://itunes.apple.com/us/app/nickzom-calculator/id1331162702?mt=8
Once, you have obtained the calculator encyclopedia app, proceed to the Calculator Map, then click on Economics under Engineering.

Now, Click on Economic Equivalence under Economics

Now, Click on Future Worth under Economic Equivalence

The screenshot below displays the page or activity to enter your values, to get the answer for the future worth according to the respective parameters which are the Present Amount or Worth (P), Interest Rate (i) and Number of Years (N).

Now, enter the values appropriately and accordingly for the parameters as required by the Present Amount or Worth (P) is 12, Interest Rate (i) is 0.2 and Number of Years (N) is 10.

Finally, Click on Calculate

As you can see from the screenshot above, Nickzom Calculator– The Calculator Encyclopedia solves for the future worth and presents the formula, workings and steps too.