How present and future value relate
Future value (FV) and present value (PV) are two sides of the same coin:
Future value answers "what will today's money be worth later", while present value answers "what is a future sum worth today". In planning they work together: use present value to translate a distant goal into the amount you need to set aside now, then use future value to check whether your current plan actually gets there.
For example, to hold 500,000 twenty years from now at an assumed 3% annual rate compounded monthly, you would need to invest about 275,000 today — the classic use of present value. Conversely, investing 275,000 today at the same rate would grow to roughly 500,000 in twenty years.
For the derivation behind the formulas, see the formula explained. For practical input advice, read how to use the calculator.