Finance Calculator
Solve for any Time Value of Money (TVM) variable: PV, FV, rate, periods, or periodic annuity.
Parameters & Inputs
Summary & Breakdown
About the Finance Calculator
The Time Value of Money (TVM) is the fundamental governing principle of finance. It dictates that money received today possesses greater value than the identical sum in the future due to its earning potential.
Financial professionals and corporate treasurers use TVM equations to value capital expenditures, bond yields, lease terms, and annuities.
This universal finance calculator lets you solve for any core TVM variable€”including Future Value (FV), Present Value (PV), or periodic payment (PMT).
How the Calculations Work
Solves the general five-variable financial annuity equation.
FV = PV(1 + r)^n + PMT * [((1 + r)^n - 1) / r]
Variables & Definitions
- PV: Present starting capital value
- FV: Future target terminal value
- PMT: Periodic installment annuity cash flow
- r: Periodic interest rate as decimal (e.g. 0.5% = 0.005)
- n: Total payment periods
PV = $5,000, PMT = $200 per month, r = 0.5% monthly, n = 60 periods: FV = 5000*(1.005)^60 + 200*[(1.005^60 - 1)/0.005] = $6,744.25 + $13,945.59 = $20,689.84.
Key Terms Explained
Discount Rate
The interest rate used to discount future cash flows back to present value.
Ordinary Annuity
Annuity contracts where payments occur at the conclusion of each period.
Annuity Due
Annuities where payments are due at the start of each period.
Net Present Value (NPV)
The sum of all incoming future cash flows discounted to today minus initial capital outlay.
Practical Tips & Pitfalls to Avoid
Match rate with period
Ensure monthly periods use monthly rates (Annual rate / 12), not annual rates.
Observe sign conventions
In standard financial models, money paid out is negative and money received is positive.
Evaluate opportunity cost
Always compare internal rate of return against risk-free treasury rates.
Model inflation-adjusted TVM
Subtract expected inflation from your nominal discount rate for real purchasing evaluations.
Frequently Asked Questions
PV (Present Value), FV (Future Value), PMT (Payment), N (Periods), and I/Y (Interest Rate).
Select "Present Value (PV)" from the dropdown and input your target FV, interest rate, and periods.
Because capital today can earn interest and invest in productive assets, plus it is immune to future inflation risk.
The discount rate is the rate of return used to compute present value of future cash flows.
A series of recurring payments made at equal intervals over time.