Time Value of Money Calculator
Calculate the future value or present value of money over time. Handles a lump sum, recurring deposits, an interest rate, and any compounding frequency.
Calculator by Toolsloft ↗- Future value
- $2,886.68
Money available now is worth more than the same amount later because it can be invested and grow. This calculator moves a sum forward to a future value or backward to a present value at the interest rate and compounding you choose, so you can compare cash flows across time on equal terms.
How this is calculated
Future value uses FV = PV x (1 + i)^n plus an ordinary-annuity term PMT x ((1 + i)^n - 1) / i for recurring deposits. Present value uses PV = FV / (1 + i)^n. The periodic rate i is the annual rate divided by the number of compounds per year, and n is years times that frequency. These are the standard time-value-of-money formulas from corporate finance.
How to use
- Choose whether you want a future value or a present value.
- Enter the amount, annual interest rate, number of years, and compounding frequency.
- For future value, add a recurring deposit if you make one, then read the result.
Examples
- $1,000 now + $100/yr, 5% for 10 years:
Future value $2,886.68 - $2,000 in 5 years, 6% compounded monthly:
Present value $1,482.74
FAQ
- What is the time value of money?
- It is the idea that a given amount of money is worth more today than in the future, because today it can be invested to earn a return. Discounting and compounding put amounts from different dates on a comparable basis.
- What does compounding frequency change?
- More frequent compounding earns interest on interest sooner, so it raises future value and lowers present value slightly for the same annual rate. Monthly compounding is common for savings and loans.
- Are the recurring deposits at the end of each period?
- Yes. The future-value calculation treats deposits as an ordinary annuity, made at the end of each compounding period.