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Finance Calculator

This finance calculator can be used to calculate the future value (FV), periodic payment (PMT), interest rate (I/Y), number of compounding periods (N), and PV (Present Value). Each of the following tabs represents the parameters to be calculated. It works the same way as the 5-key time value of money calculators, such as BA II Plus or HP 12CP calculator.
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FV = $-9,455.36
Sum of all periodic payments $-20,000.00
Total Interest $9,455.36

Schedule

Period PV PMT Interest FV

Frequently Asked Questions

What is the Time Value of Money (TVM)?

The Time Value of Money (TVM) is a core financial principle stating that a sum of money is worth more now than the same sum will be in the future because money available today can be invested to earn interest.

What do PV, FV, PMT, N, and I/Y stand for?

N is the Number of Periods. I/Y is the Interest Rate per period. PV is Present Value (current worth). PMT is Periodic Payment. FV is Future Value (worth at a future date).

Why do I get a negative number in my financial calculation?

Financial calculators use cash flow sign conventions. Positive values represent cash inflows (money received), while negative values represent cash outflows (money paid out, like a monthly loan payment or an initial deposit to an investment account).

What is the Time Value of Money (TVM)?

The Time Value of Money (TVM) is a core financial principle stating that a sum of money is worth more now than the same sum will be in the future. This is because money available today can be invested and earn interest. The foundational concept of TVM is that any amount of money has earning capacity, meaning the sooner you receive it, the more it is worth.

This Finance Calculator uses TVM formulas to calculate any of the standard variables involved in financial annuities, loans, mortgages, and investment accounts.

The Five TVM Variables

When using a standard financial calculator (like a BA II Plus or HP 12C), calculations revolve around five distinct variables. Our calculator tabs match these exactly:

  • N (Number of Periods): The total number of payment or compounding periods over the lifetime of the financial arrangement. For example, a 5-year auto loan paid monthly would have an N of 60 (5 years × 12 months).
  • I/Y (Interest Rate per Year): The annual interest rate or discount rate.
  • PV (Present Value): The current worth of a future sum of money or stream of cash flows given a specified rate of return. For a loan, this is the original borrowed amount.
  • PMT (Periodic Payment): The amount of money paid or received at each regular interval. This amount remains constant over the life of the annuity.
  • FV (Future Value): The value of a current asset at a specific date in the future based on an assumed rate of growth. For a standard loan that is fully paid off, the FV is usually $0.

Cash Flow Sign Convention

In financial calculations, it is critical to understand the concept of cash inflows and outflows. Financial calculators use positive and negative signs to represent the direction of cash flow:

  • Positive values (Inflows): Money that you receive. For example, receiving the principal amount of a loan from a bank is an inflow (Positive PV).
  • Negative values (Outflows): Money that leaves your pocket. For example, making monthly payments towards that loan is an outflow (Negative PMT). Depositing money into a savings account is also an outflow (Negative PV) because it leaves your immediate possession to be invested.

Entering the correct signs for PV, PMT, and FV is essential for the calculator to provide accurate results.

Common Applications

Mortgages and Auto Loans

You can calculate the exact monthly payment (PMT) of a loan by inputting the loan amount (PV), the interest rate (I/Y), the total number of months (N), and setting the Future Value (FV) to $0.

Retirement Savings

If you want to know how much you will have saved by retirement (FV), you can input your current savings (PV as a negative number), your monthly contributions (PMT as a negative number), the expected annual return (I/Y), and the number of compounding periods (N).