Future Value (FV) is a formula used in Finance to calculate the value of a cash flow at a later date than originally received. This idea that an amount today is worth a different amount at a future time is based on the time value of money.
The FV here is for an asset with interest compounded annually.
The Future Value (FV) can be calculated in two ways i.e. For an asset with Simple annual interest or for an asset with interest compounded annually.
Mr. Edward Ombui has $3000 invested for 4 years at 11%. If compounded annually, the investment has a future value of $4,554.21