1. What is Financial Calculator?

The Financial Calculator computes time value of money calculations including present value (PV) and future value (FV) using standard financial formulas. These calculations are fundamental in finance for investment analysis, loan calculations, and retirement planning.

2. How Does the Calculator Work?

The calculator uses these financial formulas:

Where:

• \( PV \) — Present Value (dollars)
• \( FV \) — Future Value (dollars)
• \( r \) — Interest rate per period (decimal)
• \( n \) — Number of periods

Explanation: The formulas account for the time value of money, showing how money's value changes over time with interest.

3. Importance of Financial Calculations

Details: Understanding present and future values helps in making informed investment decisions, comparing financial options, and planning for future financial needs.

4. Using the Calculator

Tips: Select calculation type (PV or FV), enter the known values, interest rate (as decimal), and number of periods. All values must be valid (rate between 0-1, periods ≥1).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between PV and FV?
A: PV is the current worth of a future sum, while FV is what a current sum will grow to in the future with interest.

Q2: How should I enter the interest rate?
A: Enter as decimal (e.g., 5% = 0.05). This calculator uses periodic rate, not annual unless periods are in years.

Q3: What time periods can I use?
A: Any consistent time unit (years, months, etc.) as long as rate matches (annual rate for years, monthly rate for months).

Q4: Can I calculate interest rate or periods?
A: This version calculates PV or FV only. Future versions may include solving for rate or periods.

Q5: Are taxes or inflation considered?
A: No, these are basic time value calculations. For real-world applications, additional factors may need consideration.