Financial Calculator Help
The financial calculator can be used to compare investment alternatives and to solve a variety of financial problems involving loans, mortgages, leases, savings, and annuities. Please see Time Value of Money Concepts for examples.
There are five key variables in time value of money problems: present value, future value, payment, interest rate, and number of periods. You usually know four of these values and wish to solve for the fifth. For instance, you may know the loan amount (present value), interest rate, length of the loan in months (periods), and the future value (zero or a balloon payment) and want to find how much your monthly payments will be. You are probably already familiar with payments, interest rates, and periods. Present value and future value are general terms, and each industry has its own terms for them. See present value and future value to learn more.
You can enter any four of these values into the fields at the top of the calculator, and then solve for the fifth by clicking on the button just to the right of the remaining field:
These restrictions apply to all TVM problems:
The calculator is based on a cash-flow model. Funds that you receive should be entered as positive numbers, and funds that you pay out should be entered as negative numbers. Creating a cash-flow diagram may help you understand the problem better.
The calculator will detect the country and language setting of your browser and expect
you to enter numbers in that format. For example, if your browser is set to US English,
enter numbers as
The payment and compounding periods do not have to coincide. For example, you could make monthly payments (PAYMENTS PER YEAR = 12), but interest could be compounded only twice per year (COMPOUNDING PER YEAR = 2)
To adjust the number of decimal places and the type of rounding that appears in the entry fields and the amortization schedule:
Payments may be made either at the very beginning or at the very end of all periods. The default is payment at the end of each period. You must change this default for some problems such as annuities due where the payments occur at the beginning of the period.
To change the setting:
You can create and amortization table that shows the amount of each payment that is applied to principal and interest, and the ending balance for each period. Normally, you should solve for PAYMENT just before creating the schedule.
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