Time Value of Money (TVM) Calculator

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Usage of Time Value of Money Calculator

Time value of money calculator's usage is simple. Just leave the one you want to calculate and fill the others. Then click the button of the one you want to calculate.


Time Value of Money Concept


Definitions - Time Value of Money (TVM)


Time Value of Money


We can simply define time value of money as the difference in the money's value today and future.


Future Value (FV)


Future value (FV), as it can be understood from its name, is the asset's value at a specific time [1].


Present Value (PV)


The value of an asset at the present time is called as present value (PV) [2].


Time Value of Money Formulas


Let

\( FV \) = Future Value
\( PV \) = Present Value
\( N \) = Period
\( PMT \) = Payment
\( I/Y \) = Annual Rate
\( i \) = Interest Rate per Period

\( t = 1 \), if payment made at the beginning of the period.
\( t = 0 \), otherwise.

We have

Future Value Formula - How to Calculate Future Value

\[ FV = PV \times (1 + i)^N + PMT \times \frac{(1+i)^N - 1}{i} \times (1 + i \times t) \]

Present Value Formula - How to Calculate Present Value

\[ PV = FV - PMT \times \frac{(1+i)^N - 1}{i} \times \frac{(1 + i \times t)}{(1+i)^N} \]

PMT Formula - How to Calculate PMT

\[ PMT = \frac{FV - PV \times (1+i)^N}{((1+i)^N - 1)\times (1 + i \times t)} \times i \]

N can be derived similarly and I/Y can be computed using numerical methods.

Examples


Example 1

Input

Present Value = 10000
Interest Rate = 5%
Period = 3
Payment = 0

Output

Future Value = 11576.25

Example 2

Input

Present Value = 1000
Interest Rate = 6%
Period = 10
Payment = 100
Frequency = Annually
Mode = BEG

Output

Future Value = 3188.012

References

1. Time value of money (n.d.). Retrieved June 13, 2017, from https://en.wikipedia.org/wiki/Future_value

2. Future and Present Values (n.d). Retrieved June 13, 2017, from http://www.flinders.edu.au/...