Time Value of Money Formula

The time value of money (TVM) is the concept that says money available at the present time is worth more in the future due to its potential earning capacity. This principle of finance is based the fact that money can earn interest. Here is the TVM formula which will guide you to calculate the time value of money with the known input values. Also, this time value of money formula page provides you the interest rate, number of years, future value and present value formula.

TVM Formula

Formula:

PV = ((FV / (1 + IR / P)Y x P) x 100) / 100
FV = ((PV x (1 + IR / P)Y x P) x 100) / 100
IR = ((P x (FV / PV)1/(Y x P)-1) × 10000) / 100
Y = ((ln (FV / PV) / ln(1 + (IR / P))) / P x 100) 100


Where,

PV = Present Value
FV = Future Value
IR = Annual Interest Rate
Y = Number of Years
P = Periods Per Year

Related Calculator:

This Time value of money formula will be a very useful formula for you to plan for the money management. Future value and present value formula need an interest rate for performing calculations.


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