Time Value of Money Calculator
Calculate present value, future value, payment, interest rate, or time period. This comprehensive TVM calculator handles different compounding frequencies and payment timing.
Calculation Type
Values
Future Value
Starting with $10,000 and adding $500 per period at 7% for 10 years
Formula Used
Rule of 72
At 7% interest, money doubles in approximately 10.3 years (Rule of 72). Actual: 10.2 years.
Year-by-Year Growth
| Year | Start | Contributions | Interest | End Balance |
|---|---|---|---|---|
| 1 | $10,000 | $6,000 | $919 | $16,919 |
| 2 | $16,919 | $6,000 | $1,419 | $24,339 |
| 3 | $24,339 | $6,000 | $1,956 | $32,294 |
| 4 | $32,294 | $6,000 | $2,531 | $40,825 |
| 5 | $40,825 | $6,000 | $3,148 | $49,973 |
| 6 | $49,973 | $6,000 | $3,809 | $59,782 |
| 7 | $59,782 | $6,000 | $4,518 | $70,299 |
| 8 | $70,299 | $6,000 | $5,278 | $81,578 |
| 9 | $81,578 | $6,000 | $6,094 | $93,671 |
| 10 | $93,671 | $6,000 | $6,968 | $106,639 |
Rate Comparison
| Rate | Future Value |
|---|---|
| 3% | $83,364 |
| 5% | $94,111 |
| 7% | $106,639 |
| 10% | $129,493 |
| 12% | $148,023 |
| 15% | $182,011 |
Time Period Comparison
| Years | Future Value |
|---|---|
| 5 years | $49,973 |
| 10 years | $106,639 |
| 15 years | $186,971 |
| 20 years | $300,851 |
| 25 years | $462,290 |
| 30 years | $691,150 |
Time Value of Money Concepts
Present vs Future Value
A dollar today is worth more than a dollar tomorrow because it can earn interest. Present value discounts future money to today's terms; future value projects today's money forward.
Compounding Frequency
More frequent compounding = more growth. Monthly compounding at 12% yields more than annual compounding at 12% because interest earns interest more often.
The Rule of 72
Divide 72 by the interest rate to estimate years to double. At 6%, money doubles in ~12 years. At 12%, it doubles in ~6 years. Simple but powerful mental math.
Frequently Asked Questions
TVM Variables
| Variable | Description |
|---|---|
| PV | Present Value - today's value |
| FV | Future Value - value at end of period |
| PMT | Payment - regular contribution/withdrawal |
| r | Interest Rate - rate per period |
| n | Periods - number of compounding periods |
Key Formulas
- Future Value: FV = PV × (1 + r)ⁿ
- Present Value: PV = FV ÷ (1 + r)ⁿ
- Rule of 72: Years to double ≈ 72 ÷ rate
Compounding Frequency Impact
$10,000 at 10% for 10 years:
- Annual: $25,937
- Monthly: $27,070
- Daily: $27,181
Common Applications
- Retirement planning
- Loan amortization
- Investment analysis
- Comparing financial options
- Valuing annuities