This Calculator accepts and returns positive values for almost all calculations.  I figure most people dont think, "I get positive 50,000 from the bank, so I have to pay negative 800 back a month."  I have tried to eliminate that kind of confusion as much as possible.  (see complete list of examples below)

The major exception is for computing a payment where there is a remaining balance, or Future Value (FV), at the end of the period (Future Value is typically $0 at the end of a loan period, you would owe nothing).   For example, if you put $1 million in the bank, and want to compute payments based on living off of the interest, then you need to include a FV in the payment calculation.  The FV in this case would be $1 million of course, and that value must have a sign opposite Present Value (PV).

So, if you invested the $1 million and you know you can get 7%, and you want to have a million bucks left over at the end of 20 years, you would enter $1,000,000 for PV, 20 for Period (n), 7 for interest (i) and $-1,000,000 for FV.  If you use a positive value for FV in this example, you would not get an accurate result (the result is accurate mathematically, but it is probably not the true answer to the question you are asking).

Examples (These examples can be applied to many different scenarios)
• How much will my Loan or Mortgage payment be?
• How much will I have in 20 years if I invest $20,000 today
• My daughter is 8, if I need 150,000 dollars for her tuition in 10 years, how much do I need to put away each month?
• How much cash do I need to accumulate into my account to be able to pay myself 1,500 dollars per week for 20 years?

Loans and Mortgages

To compute a loan or mortgage payment you need to have the loan amount (PV), the annual interest rate (i), the period of time for the loan (n), and the frequency of payments. For example, if the loan amount is 180,000, the interest rate is 6.75%, the period of time for the loan is 30 years and you will make payments monthly, enter the following information in the calculator...

• Enter 180,000 in the Present Value (PV) field.
• Enter 30 in the Periods (n) field, and make sure the years (yrs) option is selected, or enter 360 and make sure the months (mths) option is selected
• Enter 6.75 in the Interest (i) field.
• Select Monthly (12), in the Payment Frequency field
• Choose the (Pmt) option to calculate the payment
• Click Compute

After you click compute you will see a message on the calculator telling you what your payment will be (in this case $1,167.48). The payment amount will also be in the Payment field on the calculator.

You can use this to calculate how long it will take to pay off the loan if you make extra payments. For example, after you calculate the loan, change Payment Frequency to "Two Extra Payments (14)". Then select (n) to calculate the number of periods. Click Compute. Look at the amount in the Periods (n) field and you will see that with just two extra payments you would pay off the loan in a little over 20 years.

For normal loans I suggest you always compare Bi-weekly payments to monthly payments. It will always result in a lower total monthly payment amount, and often times, significantly lower.

The Future Value (FV) of Money

• Enter 20,000 in the Present Value (PV) field.
• Enter 20 in the Periods (n) field and make sure the years (yrs) option is selected
• Enter 12 in the Interest (i) field.
• Payment Frequency will not affect the Future Value (FV) calculation (it will affect the Future Value of an Annuity (FVa) calculation)
• Choose the (FV) option to calculate the Future Value
• Click Compute

As you see, the money will grow to $217,851.07 in 20 years with an Interest Rate (i) of 12%.

Payment (Pmt) Calculation Based on Future Value (FV)

• Enter 150,000 in the Future Value (FV) field
• Enter 10 in the Periods (n) field and make sure the years (yrs) option is selected
• Enter 12 in the Interest (i) field.
• For Payment Frequency use Monthly (12)
• Choose the (Pmt) option to calculate the Payment
• Click Compute

The calculator returns $652.06, which is the amount you need to save each month for 10 years at 12% to have $150,000 in your account. Try this calculation with the Bi-weekly Payment Frequency, and you will see that if you put money away every two weeks, instead of monthly, you will need to put away $299.58, or $600 a month. A $50 dollar savings. Although it is not a true savings, it does allow you to pay less per pay check, if you are getting paid bi-weekly.

Present Value of an Annuity (PVa) calculation

• Enter $1500 in the Payment (Pmt) field
• Enter 20 in the Periods (n) field and make sure the years (yrs) option is selected
• Enter 12 in the Interest (i) field.
• For Payment Frequency use Weekly (52)
• Choose the (PVa) option to calculate the Payment
• Click Compute

The amount you need in your account if you are getting a Rate of 12%, to pay yourself $1500 per week for 20 years is $590,870.06. You can verify this if you enter 590,870.06 in the Present Value (PV) field, enter 20 in the Period (n) field, enter 12 in the Interest Rate (i) field, choose the Weekly (52) Payment Frequency choose the (Pmt) option for the calculation and click Compute. As you can see, this amount will pay $1,500.00 per week.