Finance Calculator

How this result is built

Solve future value, payment, rate, periods, or present value the way a five-key financial calculator does.

This is the five-key time-value layout used on calculators such as the BA II Plus. You fill four values and solve the fifth. Money you pay out is negative. Money you receive is positive. The unknown is the cash flow that makes the whole equation balance to zero.

What the opening example is for

With N at 10, I/Y at 8, PV at 20,000, and PMT at −2,000, the future value is −14,205.38. The minus sign means an outflow at the end. In plain words, about $14,205.38 is still there to withdraw. Change P/Y and C/Y when the year is split into months or the rate compounds on a different schedule.

The walkthrough below uses the numbers already sitting in Finance Calculator. Press Calculate and the headline should match this page. Then put your own figures in. The math does not run until you press the button, and Clear hides the result.

What each field is doing

The “N (# of periods)” line on Finance Calculator starts at 10. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Finance Calculator treats “I/Y (Interest per year)” as its own entry, and the form opens with 8%. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

Before you replace it, “PV (Present Value)” reads $20,000.00 on Finance Calculator. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Look at “PMT (Periodic Payment)” first if you are checking Finance Calculator: the filled value is -$2,000.00. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The remaining fields

The “FV (Future Value)” line on Finance Calculator starts at $0.00. Leave that figure only when it matches the statement, the quote, or the plan you are testing. Press Calculate after the edit so the chart and the schedule move with it.

Finance Calculator treats “P/Y, periods per year” as its own entry, and the form opens with 1. A round example is useful for learning the page. It is a poor substitute for the number on your own paperwork, so replace it and run the form again.

Before you replace it, “C/Y, compounds per year” reads 1 on Finance Calculator. The other fields stay put while you change this one. That is the clean way to see what this line is doing inside the result.

Look at “Payment timing” first if you are checking Finance Calculator: the filled value is End of each period. If the label is a rate, type the annual figure the contract uses. If it is money, type the amount that will actually move, not a rounded hope.

The opening result, line by line

Press Calculate on the opening form and Future value is -$14,205.38. That is the number the rest of this section is talking about.

N is 10.00 when you run the opening figures on Finance Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, i/Y is 8.00%. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Finance Calculator reports that pV is $20,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

PMT is -$2,000.00 when you run the opening figures on Finance Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, fV is -$14,205.38. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

How those lines were produced

Finance Calculator reports that sum of all periodic payments is -$20,000.00. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

Total interest is $14,205.38 when you run the opening figures on Finance Calculator. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

On this opening pass, effective annual rate is 8.00%. That line is part of the same calculation as the headline. It is not a second balance you can spend on top of the result. Change one input and press Calculate if you want to see whether this line moves.

The signed future value is an outflow that balances the cash flows. In everyday terms, about $14,205.38 is still available at the end.

The formula line on the page is PV(1+i)^N + PMT(1+i·type)·((1+i)^N−1)/i + FV = 0. It is there so you can see the relationship the buttons are using. A schedule, when the page draws one, is that same series written row by row.

A second pass changes only “N (# of periods)”, from 10 to 11.00. Future value moves from -$14,205.38 to -$13,341.81. Nothing else on the form was edited, so the gap between those two results is the effect of that one field on Finance Calculator. If the gap is tiny, this page is not very sensitive to that entry. If the gap is large, get that entry from a document before you plan around the result.

What this page will not claim

Finance Calculator compounds the rate you type. Markets do not pay a flat rate, and a fund fee comes out of the return before you should type it. The page is the equation, not a forecast and not a recommendation to buy or sell.

Finance Calculator stops at its own formula. When the next question is different, open Compound Interest Calculator (Interest that starts earning interest of its own.); Present Value Calculator (What a future sum is worth today.); Future Value Calculator (What today’s balance becomes.). Do not add those results to this one as if they were the same kind of dollar.

Check the result before you use it

Start on Finance Calculator by reading the labels, not the headline. The opening labels are N (# of periods) (10), I/Y (Interest per year) (8%), PV (Present Value) ($20,000.00), PMT (Periodic Payment) (-$2,000.00), FV (Future Value) ($0.00), P/Y, periods per year (1), C/Y, compounds per year (1), Payment timing (End of each period). If a label is not the fact you have, the result cannot turn into that fact later. The illustration on the form lands on -$14,205.38. When you press Calculate and see that same figure, the button and this explanation are using one formula.

Change one field at a time. Write down the headline, edit a single line, and press Calculate again. A large jump means that line carries the result. A line that does not move is a line the formula ignores, which is a reason to confirm you opened the right page. Finance Calculator is built for one job: FV, PMT, I/Y, N, and PV, with the sign convention shown. The description on the page says the same thing in a sentence: Solve future value, payment, rate, periods, or present value the way a five-key financial calculator does.

When the paperwork disagrees

Then hold the headline next to a source outside the site. That source might be a loan estimate, an account statement, a pay stub, or the public limit named in the methodology. A few cents of difference on a long schedule is ordinary rounding. A different rate, a fee you never typed, or a tax the form does not ask for is not rounding. Correct the input. Do not average the page with the paperwork.

When the outside source still disagrees, Finance Calculator has reached the edge of what it will claim. It will not phone a lender, pull a county record, or apply a credit you left blank. Send the calculator name, every input, and the result you expected through the contact page if you think the formula itself is wrong. Until that is settled, read -$14,205.38 as the output of the fields above and nothing else.

FAQs