1. What is Future Value of Uneven Cash Flows?

The Future Value (FV) of uneven cash flows calculates what a series of different cash flows will be worth in the future when invested at a given interest rate. Unlike annuities where payments are equal, this handles varying amounts.

2. How Does the Calculator Work?

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

Where:

• \( CF_t \) — Cash flow at time period t
• \( r \) — Periodic interest rate (as decimal)
• \( n \) — Total number of periods

Explanation: Each cash flow is compounded forward to the end of the investment horizon, accounting for different time periods remaining for each cash flow to grow.

3. Importance of FV Calculation

Details: Calculating future value helps in investment planning, retirement savings projections, and comparing different investment scenarios with irregular cash flows.

4. Using the Calculator

Tips: Enter interest rate as percentage (e.g., 5 for 5%), number of periods in years, and comma-separated cash flows (e.g., "100,200,300").

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between FV of even and uneven cash flows?
A: Even cash flows use annuity formulas, while uneven cash flows require summing individually compounded amounts.

Q2: Can I use monthly cash flows with annual rate?
A: No, you should convert the annual rate to monthly and use months as periods for monthly cash flows.

Q3: How does timing of cash flows affect FV?
A: Earlier cash flows have more time to compound, contributing more to the total future value.

Q4: What if my cash flows are negative?
A: Negative values represent withdrawals. The calculator handles both positive (deposits) and negative (withdrawals) cash flows.

Q5: Is this applicable to stock investments?
A: Yes, for stocks with irregular dividend payments or varying additional investments.