Time Value of Money Calculator

About the Time Value of Money Calculator

Money now is worth more than the same money later, because it can earn interest. The five values of a time value of money problem are tied together by one equation, where r is the rate per period and n the number of periods: present value x (1 + r)^n + payment x ((1 + r)^n - 1) / r + future value = 0, with the payment multiplied by (1 + r) when it falls at the start of each period. The tool uses the sign convention of the PV, FV, PMT, NPER and RATE functions in spreadsheets: money you pay out, such as a deposit or a loan repayment, is negative, and money you receive is positive. Saving 100 a month at 5 percent a year for 10 years gives a future value of 15,528.23, of which 12,000 is what you paid in. The present value of 10,000 received in 10 years at 5 percent a year is 6,139.13. A 200,000 loan over 30 years at 6 percent has a monthly payment of 1,199.10. Money doubles in about 10.24 years at 7 percent. The present value, future value, payment and number of periods have closed form answers, and the rate is found by a numerical search, so the answer is exact to many digits. The annual rate is divided by the number of periods per year, so it is a nominal rate, not an effective annual rate; if you have an effective rate, convert it first. Interest earned is the future value plus the present value plus the payments, with the sign convention applied. The results are estimates for planning and do not include fees or taxes. Nothing is uploaded.