1. What is Future Value of Uneven Cash Flows?

The Future Value (FV) of uneven cash flows calculates what a series of unequal periodic cash flows will be worth at a future date, given a specific interest rate. This is different from annuity calculations where payments are equal.

2. How Does the Calculator Work?

The calculator uses the future value of uneven cash flows formula:

Where:

• \( CF_t \) — Cash flow at time period t
• \( r \) — Periodic interest rate (in decimal)
• \( n \) — Total number of periods
• \( n-t \) — Number of compounding periods remaining

Explanation: Each cash flow is compounded forward to the end of the last period, with earlier cash flows compounding for more periods.

3. Importance of Future Value Calculation

Details: Calculating future value helps in financial planning, investment analysis, and comparing different cash flow scenarios. It's essential for evaluating investment opportunities with irregular returns.

4. Using the Calculator

Tips: Enter cash flows as comma-separated values (e.g., 100,200,300). The interest rate should be in percentage (e.g., 5 for 5%). The calculator assumes each cash flow occurs at the end of consecutive periods.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between FV of uneven flows and annuities?
A: Annuities have equal periodic payments, while uneven cash flows can vary in amount each period.

Q2: Does the order of cash flows matter?
A: Yes, earlier cash flows compound longer and thus contribute more to the total future value.

Q3: What time period does this assume?
A: The calculator assumes annual compounding by default. For other periods, adjust the rate accordingly.

Q4: Can I include negative cash flows?
A: Yes, negative values represent withdrawals or outflows and will reduce the future value.

Q5: How does this differ from NPV calculation?
A: NPV discounts to present value at time zero, while FV compounds to a future date.