Time Value of Money Calculator
Calculate Present Value or Future Value of money.
Understand how inflation and interest rates affect the value of money over time.
Calculated Value
Time Value of Money (TVM) is the concept that money today is worth more than the same amount in the future due to its earning potential.
Future Value (FV) — what a present amount will be worth later:
FV = PV × (1 + r)^n
Present Value (PV) — what a future amount is worth today:
PV = FV / (1 + r)^n
Where:
- PV = Present Value
- FV = Future Value
- r = Interest rate per period (as decimal)
- n = Number of periods
Practical uses:
- Investing: What will $10,000 be worth in 20 years at 7%? → $38,697
- Inflation: What is $100,000 in 10 years worth today at 3% inflation? → $74,409
- Business decisions: Is a future payment worth accepting vs. cash now?
Example: $50,000 today at 6% for 15 years:
- Future Value: $119,828
$200,000 needed in 10 years, discount rate 5%:
- Present Value needed: $122,782