Finance Calculator

Calculate Future Value, Present Value, Payment, Interest Rate, and Number of Periods

Time Value of Money Calculator

Calculate any variable in the time value of money equation. Select what you want to calculate, then enter the other known values.

Financial Variables

Current value or initial investment (enter as positive)
Value at end of investment period
Regular payment per period
Annual interest rate
Investment time period in years
Future Value
$0.00

Calculation Details

About Finance Calculator

This finance calculator helps you solve for any variable in the time value of money equation. The time value of money is a fundamental concept in finance that recognizes that money available today is worth more than the same amount in the future due to its earning potential.

The Five Variables

Variable Symbol Description
Present Value PV The current value or initial investment amount
Future Value FV The value at the end of the investment period
Payment PMT Regular payment amount per period (annuity)
Interest Rate I/Y Annual interest rate (as a percentage)
Number of Periods N Total number of payment periods (in years)

Key Formulas

Future Value (FV) Formula:
FV = PV(1 + r)^n + PMT × [((1 + r)^n - 1) / r]

Where:
r = interest rate per period
n = number of periods
Present Value (PV) Formula:
PV = FV / (1 + r)^n + PMT × [(1 - (1 + r)^-n) / r]

Example Calculations

Example 1: Calculate Future Value
Present Value: $1,000
Payment: $100 per month
Interest Rate: 5% per year
Time Period: 10 years
Compounding: Monthly

Result: Future Value ≈ $17,624.43
Example 2: Calculate Required Payment
Present Value: $0 (no initial investment)
Future Value: $100,000 (goal)
Interest Rate: 7% per year
Time Period: 20 years
Compounding: Monthly

Result: Required Monthly Payment ≈ $192.43

Understanding Compounding

Compounding frequency affects how often interest is calculated and added to your account. More frequent compounding results in higher returns because you earn interest on your interest more often.

Frequency Times per Year Example Impact
Annually 1 Interest calculated once per year
Semi-annually 2 Interest calculated every 6 months
Quarterly 4 Interest calculated every 3 months
Monthly 12 Interest calculated every month
Weekly 52 Interest calculated every week
Daily 365 Interest calculated every day

Payment Timing

Payment timing determines whether payments are made at the beginning or end of each period. This affects the total amount of interest earned or paid.

  • End of Period (Ordinary Annuity): Payments made at the end of each period. Most common for loans and regular savings.
  • Beginning of Period (Annuity Due): Payments made at the start of each period. Common for rent, leases, and insurance premiums.

Common Use Cases

Retirement Planning:
Calculate how much you need to save monthly to reach your retirement goal. For example, if you want $1 million in 30 years with 7% annual return, you'd need to save approximately $820 per month.
Loan Analysis:
Determine the present value of a loan based on your monthly payment amount. If you can afford $500/month for 5 years at 6% interest, you can borrow approximately $25,800.
Investment Growth:
See how much your current investment will grow. $10,000 invested at 8% annual return for 20 years will grow to approximately $46,610.

Tips for Using This Calculator

  • Be Consistent: Enter all cash outflows (investments, deposits) as positive numbers and cash inflows (returns, withdrawals) as negative numbers, or vice versa.
  • Match Periods: If you're making monthly payments, use monthly compounding for more accurate results.
  • Consider Inflation: For long-term calculations, remember that inflation will reduce the purchasing power of future money.
  • Tax Implications: This calculator doesn't account for taxes. Consult a financial advisor for tax-adjusted calculations.
  • Realistic Returns: Historical average stock market returns are around 10% annually, but past performance doesn't guarantee future results.

Financial Planning Applications

  • Education Savings: Calculate how much to save for college tuition
  • Emergency Fund: Plan your savings to reach your emergency fund goal
  • Mortgage Decisions: Compare different loan scenarios
  • Investment Analysis: Evaluate investment opportunities
  • Pension Planning: Determine if your pension will meet your needs
  • Business Valuation: Calculate present value of future cash flows

Important Notes

  • This calculator uses standard financial formulas and assumes constant interest rates
  • Real-world investments may have variable rates and additional fees
  • Results are approximations and should not be considered financial advice
  • Always consult with a qualified financial advisor for major financial decisions
  • Consider factors like risk tolerance, time horizon, and financial goals