Tool
TVM Calculator
Time Value of Money — solve for any one of five variables: PV (present value), FV (future value), N (periods), I/Y (interest rate), or PMT (periodic payment).
Enter any four values and the fifth is computed instantly. Works for lump-sum investments, SIP-style annuities, loans, and financial goal planning.
What is Time Value of Money?
The foundation of all financial thinking: ₹1 lakh today is worth more than ₹1 lakh a decade from now. There are two reasons. First, money you have today can be invested — ₹1 lakh earning 12%/year becomes ₹3.1 lakh in 10 years. Second, inflation erodes purchasing power — ₹1 lakh in 2035 will buy less than ₹1 lakh today. TVM is the framework that connects money across time.
Every financial decision reduces to a TVM calculation: how much to SIP to reach a goal, whether a loan is worth taking, how long until you can retire, what a business investment is actually worth today. The TVM calculator above is the Swiss Army knife for all of these.
The five TVM variables
Give any four, solve for the fifth:
- N — Number of Periods: Duration of the investment or loan. In monthly mode this is months; in annual mode, years. A 10-year SIP = N 120 (monthly) or N 10 (annual).
- I/Y — Interest or Discount Rate: Always entered as annual percentage — e.g., 12 for 12%/year. The calculator converts to per-period rate internally (divides by 12 in monthly mode). This represents either the return you earn or the cost of borrowing.
- PV — Present Value: Lump-sum amount at time zero — what something is worth today. A ₹1 lakh investment you make now: PV = 1,00,000. For a home loan of ₹50 lakhs: PV = 50,00,000.
- PMT — Payment per Period: Equal, recurring cash flows — a monthly SIP, an EMI, an annuity payment, rental income. If there are no periodic flows, set PMT = 0. This is what distinguishes a TVM calculator from a simple compound interest calculator.
- FV — Future Value: The value at the end of N periods. What your corpus grows to, or what you owe at loan maturity. Set FV = 0 for a standard amortising loan (pays to zero).
The formula
Worked example (default): ₹1,00,000 lump sum + ₹5,000/month for 120 months at 12%/year
r = 12% ÷ 12 = 1%/month (0.01), n = 120 months
FV = 1,00,000 × (1.01)120 + 5,000 × [(1.01)120 − 1] ÷ 0.01
= 1,00,000 × 3.300 + 5,000 × 230.04
= ₹3,30,039 + ₹11,50,193 = ₹14,80,232
Total invested: ₹1,00,000 + (₹5,000 × 120) = ₹7,00,000. Returns earned: ₹7,80,232.
When to use each solve mode
- Solve for FV — Goal sizing: "I invest ₹2 lakh today + ₹15,000/month for 15 years at 11% — what's my final corpus?"
- Solve for PV — Lump-sum planning: "I need ₹50 lakhs in 10 years at 10% with no SIP — how much to invest today?"
- Solve for N — Time horizon: "At ₹8,000/month into a ₹2 lakh corpus at 12%, how many months to reach ₹1 crore?"
- Solve for I/Y — Return check: "I put in ₹5 lakh total over 7 years and now have ₹18 lakh — what annual rate did I actually earn?"
- Solve for PMT — Required SIP: "I need ₹1 crore in 20 years, have ₹2 lakh today, at 12% — what monthly SIP do I need?"
Frequently Asked Questions
What's the difference between TVM and CAGR?
CAGR is a special case of TVM with PMT = 0 — it measures compound annual growth on a single lump sum. TVM is more general: it handles both lump sums and periodic payments (annuities like SIPs). For a mutual fund holding with no ongoing investments, CAGR works. For an SIP portfolio with regular contributions, you need TVM — or XIRR for irregular cash flows.
Why does PV + PMT × N not equal FV?
Because of compounding. Your ₹1 lakh invested today starts earning returns immediately, and those returns compound further. Each ₹5,000 SIP also starts compounding from the moment it's invested. In the default example, you invest ₹7 lakh in total but end up with ₹14.8 lakh — the extra ₹7.8 lakh was generated purely by the compounding of returns over 10 years, not from your pocket.
What annual rate should I use for Indian investments?
Benchmarks: FD 6.5–7.5%, PPF 7.1%, debt mutual funds 7–8%, balanced advantage funds 10–11%, large-cap equity/Nifty index 11–13% (long-run historical). For conservative planning, use 10% for equity SIPs — slightly below the historical Nifty 50 CAGR of ~13% to account for costs, taxes, and bad decades.
What is an annuity, and when does PMT matter?
An annuity is any series of equal, periodic cash flows: a monthly SIP, an EMI, rental income, pension payments. PMT captures these. If you make a one-time investment with no ongoing additions, set PMT = 0 — the formula simplifies to FV = PV × (1+r)n. A home loan is a TVM problem with PV = loan amount, FV = 0, PMT = negative EMI, and N = tenure in months.