TVM Calculator

TVM Calculator to calculate the future value of money. Time value of money calculator with regular contributions to estimate how long and how much you need to invest to reach your financial goal. The time value of money formula is shown below on how to calculate time value of money.

Time Value of Money Calculator

TVM formula has option for different compound periods and additional monthly or yearly contribution. Many people doesn't realize how much their money can grow with compound interest and regular deposits.

Time Value of Money Formula

Following is the time value of money formula on how to calculate TVM.
TVM = Principal * (1 + r)^n; r = interest rate
n = number of compounding periods per year

How to Calculate Time Value of Money

To use the time value of money formula, we need a few given variables, the principal, interest rate, years to grow and the number of compounding periods per year.

For example, to find out how much $20,000 can grow in 8 years with a 5% interest rate and annual compounding, we would plugin the variables to the TVM formula as below

TVM = 20000*(1+0.05)^8 = $29,811.71

What is the time value of money?

The time value of money is the idea that the same amount of money is worth more today than in the future due to inflation and other factors.

For example, $100 today has more purchasing power today than it would be in 10 years. A $100 today can also be invested and grown to $200 or even more 10 years later.

Therefore, as an investor, one wants to receive money today rather than in the future. As a lender, he charges interest when he lends money to a borrower.