1. What is the Future Value Calculation?

The Future Value calculation determines how much a series of regular investments (weekly in this case) will grow over time, considering compound interest. It helps in financial planning and investment decisions.

2. How Does the Calculator Work?

The calculator uses the Future Value formula for weekly contributions:

Where:

• \( FV \) — Future Value
• \( PMT \) — Weekly payment amount
• \( r \) — Annual interest rate (in decimal form)
• \( t \) — Time period in years
• 52 — Number of weeks in a year

Explanation: The formula accounts for weekly compounding by dividing the annual rate by 52 and multiplying the time period by 52 weeks.

3. Importance of Future Value Calculation

Details: Understanding future value helps in setting financial goals, retirement planning, and comparing different investment options. It shows the power of compound interest over time.

4. Using the Calculator

Tips: Enter weekly payment in USD, annual interest rate as a decimal (e.g., 0.05 for 5%), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Why use weekly compounding instead of annual?
A: Weekly compounding provides more accurate results when contributions are made weekly, as interest is calculated more frequently.

Q2: How does increasing the weekly payment affect the future value?
A: Increasing the weekly payment has a direct proportional effect on the future value - doubling the payment will approximately double the future value.

Q3: What's the impact of a higher interest rate?
A: Higher interest rates exponentially increase the future value due to compounding effects over time.

Q4: Can I use this for monthly contributions?
A: No, this calculator is specifically for weekly contributions. Use a different formula for monthly contributions.

Q5: Does this account for taxes or fees?
A: No, this is a basic calculation that doesn't consider taxes, investment fees, or other real-world factors.