Web-based Financial calculator: Time Value of Money

Time Value of Money.

See the corresponding paper under the Papers link in the left sidebar or click on this link: Download paper

Notice: Negative value for owed balance and money paid to the account, positive value for balances in your favor, and withdrawal from the account. This is very important to notice. In the default example where PV=100,000 this indicates a loan from the bank of $100,000, since the bank is given you the money the value is positive, consequently, any period payment is negative since you are paying off the loan by paying back the bank the PMT value, which in this case is -$5783.01. The FV is in this example $0 since you continue PMT until the loan is paid off. However, if we assume that you only pay e.g. -$5000 per PMT then pressing Calc FV gives a balloon payment of -$43,915.06 as the final payment. As you can see the value is negative indicating that you owed the bank that amount. Remember, always know how to interpret positive and negative values.

Basic financial formulas: CF=Compound frequency, PF=payment frequency, X=1 for beginning of period payment otherwise 0, i=effective interest
Financial equation: (General)
 (1): (PV+PMT(1+iX)/i)((1+i)^NP-1)+PV+FV=0
by using:
 (2): A=(1+i)^NP-1
 (3): B=(1+iX)/i
you get:
 (4): (PV+PMT*B)*A+PV+FV=0
which solved for the other variable gives:
 (5): NP=log((PMT*B-FV)/(PMT*B+PV))/log(1+i)
 (6): PV=-(FV+A*PMT*B)/(A+1)
 (7): PMT=-(FV+PV(A+1))/(A*B)
 (8): FV=-(PV+A(PV+PMT*B)).
 (9): IR solved by iteration

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