Financial Calculators

There are many calculators around. We have included a sample Java script calculator, and have a link to online calculators here. We have also included a link to a comprehensive math tools site which you may find interesting and helpful.

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Future Value

The future value of $100.00 invested at 10% for one year would be $110.00. It is the value of the initial investment after the total investment period has passed, given a fixed rate of return. The future value of $100.00 invested at 10% for two years would be $121.00.

The equation used to calculate Future Value is:

$\mathrm{FutureValue}=\mathrm{PresentValue}(1+\frac{\mathrm{PeriodicInterestRate}}{100}{)}^{\mathrm{NumberOfPeriods}}$

Present Value

What will $100.00 be worth in a year, if inflation is 4%? It will be worth $96.15. What will it be worth in 10 years? $67.56. What will a millionaire thirty years from now be worth in today's dollars, assuming 4% inflation? $308,318.67. In general, present value is the equivalent dollar amount, in today's terms, of an amount at some time in the future given a fixed rate of inflation.

The equation used to calculate Present Value is:

$\mathrm{PresentValue}=\frac{\mathrm{FutureValue}}{(1+\frac{\mathrm{PeriodicInflationRate}}{100}{)}^{\mathrm{NumberOfPeriods}}}$

Future Value Of An Annuity

Let's say you invest $100.00 a year for two years at a 10% annual percentage rate. How much will you have at the end of the year? $231.00.

The equation used to calculate the Future Value of an Annuity is:

$\mathrm{FVAnnuity}=\mathrm{PeriodicDepositAmount}\left(\frac{\left(\right(1+\frac{\mathrm{PeriodicInterestRate}}{100}{)}^{\mathrm{NumberOfPeriods}}-1)}{\mathrm{PeriodicInterestRate}}\right)$

Present Value Of An Annuity

Let's say you invest $100.00 a year for two years at a 10% annual percentage rate and the rate of inflation is 4%. What is the equivalent dollar amount, in today's terms, of an amount you will have after two years? $213.57.

The equation used to calculate the Present Value of an Annuity is:

$\mathrm{PVAnnuity}=\mathrm{PeriodicDepositAmount}\left(\frac{(1-(\frac{1}{(1+(\frac{\mathrm{PeriodicInterestRate}}{100}){)}^{\mathrm{NumberOfPeriods}}}\left)\right)}{\left(\frac{\mathrm{PeriodicInterestRate}}{100}\right)}\right)$

Mortgage Payment

How much can you afford to borrow? Let's say you want to borrow $100,000.00 at 8% for 30 years. What will your monthly payments be? First, an 8% Annual Percentage Rate means an 8/12%, or 0.6667% monthly percentage rate. 30 years is 30*12 months, or 360 months. Plug these in to the form below, and you will find that the monthly payments would be $733.76.

The equation used to calculate the Mortgage Payment is:

$\mathrm{PeriodicPaymentAmount}=\mathrm{LoanAmount}\left(\frac{\left(\right(\frac{\mathrm{PeriodicInterestRate}}{100}\left)\right(1+\left(\frac{\mathrm{PeriodicInterestRate}}{100}\right){)}^{\mathrm{NumberOfPeriods}})}{\left(\right(1+\left(\frac{\mathrm{PeriodicInterestRate}}{100}\right){)}^{\mathrm{NumberOfPeriods}}-1)}\right)$

Retirement Income Table

You've saved quite a nest-egg and are ready to hit the golf coarse, sailboat, beach, whatever. How much can you afford to spend without having to work again? For example, suppose you have a cool million in the bank and can get a steady 8% annual rate of return. You want to keep up with inflation though, so you've got to include a 4% inflation rate which means that the amount you withdraw will be greater every year - you'll actually be withdrawing a constant present value amount, not just a fixed amount. Also suppose you want to take out a value equivalent, in today's dollars (present value), to $100,000.00. How long will this last? Plug it in and you'll find that it will last over 12 years.

Withdrawals are made at the end of the period and you may notice a few rounding errors (the variables are stored with more than two decimal places internally and numbers after the second decimal place are chopped off to format the table nicely).

Periodic Withdrawal Estimate

Suppose you have a million dollars want to know how much you can withdraw for a given number of periods before the principle is gone. Try the following calculation. Given $1,000,000.00 at an 8% annual interest rate and 4% inflation with 5 years to spend it, you can withdraw a (present value) amount of $223,657.18 each of the five years before going broke.