Multiplying this factor times the beginning value of $100.00 results in $127.63, exactly what was calculated using the Compound Interest Formula previously. At the intersection of these two values, a factor of 1.2763 appears. Note there are three pages containing interest rates 1% through 19%.įor instance, to find the future value of $100 at 5% compound interest, look up five years on the table, then go out to 5% interest.

Then go out along the top row until the appropriate interest rate is located.

To use the table, simply go down the left-hand column to locate the appropriate number of years. You will notice that this table summarizes the factors for various interest rates for various years. You can use our free, online calculator to generate a present value of $1 table which can then be printed or saved to Excel spreadsheet. Download and review Time Value of Money Table 1: Future Value Factors. Future Value Tables Using Tables to Solve Future Value ProblemsĬompound interest tables have been calculated by figuring out the (1+i) n values for various time periods and interest rates. If there was a factor that summarized the part of the compound interest formula (1 + i) n, then to find future values all that would be necessary is to multiply that factor by the beginning values. The formula for compound interest is:įor example, if one were to receive 5% compounded interest on $100 for five years, to use the formula, simply plug in the appropriate values and calculate. Instead of calculating interest year-by-year, it would be simple to see the future value of an investment using a compound interest formula. Simple interest is calculated only on the beginning principal.įor instance, if one were to receive 5% interest on a beginning value of $100, the first year interest would be:Ĭompound Interest Compound Interest Formula Interest may be thought of as rent paid on borrowed money. Simple interest 1 is a topic that most people cover in elementary school.

Note: You can use our interactive finance calculator to work out a number of different TVM problems.

A simple introduction to working time value of money problems on a financial calculator is included as well as additional resources to help understand time value of money. This overview covers an introduction to simple interest and compound interest, illustrates the use of time value of money tables, shows a matrix approach to solving time value of money problems, and introduces the concepts of intrayear compounding, annuities due, and perpetuities. Time value of money results from the concept of interest. The time value of money impacts business finance, consumer finance, and government finance.

Compound interest factor tables