Find Present Value, Future Value, Payment, N, I/Y Interest

Flat Rate

FV_n = PV₀ [1+ (n*i)]

PV₀ = FV_n/[1+ (n*i)]

As simple as ABC, you can just solve it without calculator.

FV = Future Value

PV = Present Value

n = tenure or period

i = interest

* = multiply

Eg: You save $ 100 now, interest you get is 5% p.a., after 6 years, you get $130

PV = $100 , the money you save now

i = 5% ; n = 6, how long you save; FV= $130, the money you get in future.

Or you can make it this way:

Since interest you get is 5% p.a. it means one year you will get $100*5%= $5

Save it for 6 years, therefore $5*6= $30.

Interest + Principal = $130

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However, you cannot use method above for compounding interest !!

Compounding Interest

FV_n= PV₀ (1+i)ⁿ

PV₀ = (FV_n )/[ (1+i)ⁿ]

You are now using financial calculator, so that you should learn how to find every single item in the formula.

!! REMEMBER !!

Always CLEAR MEMORY before you start calculating time value of money. How to clear memory ? Refer CLR MEMORY sharing

How to key in ?

Eg: You save $ 100 now, given compounding interest of 5% p.a., if you save it for 6 years, how much you will get after 6 years?

1. [+|-] 100 [PV] make 100 in negative (-100) 2. [I/Y] 5 3. [N] 6 4. [CPT] [FV]

Here, “FV” is what you need to find. CPT (compute) is a button which bring the “find the answer of FV” function.

Same thing if you need to find PV, N, I/Y, key in everything

(FV cannot put –ve !!!!) then final step is always:-

[CPT] [PV] to find PV [CPT] [N] to find tenure [CPT] [I/Y] to find interest