Finance Calculator — Solve TVM Problems
Time Value of Money — solve for future value (FV), periodic payment (PMT), or number of periods (N).
- Principal
- Payments
- Interest
| Period | PV | PMT | Interest | FV |
|---|---|---|---|---|
| 1 | $20,000.00 | $2,000.00 | $1,200.00 | $23,200.00 |
| 2 | $23,200.00 | $2,000.00 | $1,392.00 | $26,592.00 |
| 3 | $26,592.00 | $2,000.00 | $1,595.52 | $30,187.52 |
| 4 | $30,187.52 | $2,000.00 | $1,811.25 | $33,998.77 |
| 5 | $33,998.77 | $2,000.00 | $2,039.93 | $38,038.70 |
| 6 | $38,038.70 | $2,000.00 | $2,282.32 | $42,321.02 |
| 7 | $42,321.02 | $2,000.00 | $2,539.26 | $46,860.28 |
| 8 | $46,860.28 | $2,000.00 | $2,811.62 | $51,671.90 |
| 9 | $51,671.90 | $2,000.00 | $3,100.31 | $56,772.21 |
| 10 | $56,772.21 | $2,000.00 | $3,406.33 | $62,178.54 |
What is the time value of money?
A dollar in hand today is worth more than a dollar promised in the future, because today's dollar can be invested to earn interest. The five core variables — PV (present value), FV (future value), N (number of periods), I/Y (interest rate), and PMT (periodic payment) — are the foundation of every loan, mortgage, and investment calculation.
How FV works
$100 invested at 10% grows to $110 after one year. In year two you earn 10% on $110, not $100, so you finish with $121 — the extra $1 is interest on interest. Over time this compounding dominates returns.
PMT — periodic payments
PMT is a recurring cash flow in (or out) each period — a mortgage, a car loan, or rental income. Whether payments fall at the beginning or end of a period changes the final interest, because beginning payments earn one extra period of interest.
Why this matters
The Finance Calculator underlies most other tools — mortgages, auto loans, and credit cards are all time-value-of-money problems. Solve for whichever variable is unknown given the other four.