Financial Calculator

How to use this calculator

This is a time value of money calculator. It works the same way as the five-key financial calculators used in finance courses and by advisors. Every problem has five parts, and when you know four of them you can find the last one.

• N: the number of payment periods. For monthly payments over 5 years, N is 60.
• I/Y: the yearly interest rate as a percentage, such as 5 for 5%.
• PV: the present value, meaning the amount you start with today, such as a lump-sum deposit or a loan you receive.
• PMT: the amount paid or received each period. Leave it at 0 if there are no regular payments.
• FV: the future value, meaning the amount at the end, such as a savings goal or a loan balance left owing.

Choose the value you want to find in the tabs, fill in the other four and press Calculate. The results show the answer, the total of all payments, the total interest, a chart and a full schedule for each period.

Positive and negative numbers

The calculator tracks money from your point of view. Money that leaves your pocket is negative, and money that comes to you is positive. If you put $5,000 into a TFSA, enter PV as -5000; the money you will have later comes back as a positive FV. If you borrow $25,000, enter PV as 25000, because you receive it, and the payment will come back negative, because you pay it.

If you get an error when solving for I/Y or N, the most common cause is that every amount has the same sign. At least one amount must be negative and one must be positive.

The settings, explained

• P/Y (payments per year): how often payments are made. Use 12 for monthly, 26 for bi-weekly or 52 for weekly. N always counts these payment periods.
• C/Y (compounding per year): how often interest is added. Savings accounts and GICs often compound monthly or yearly. Fixed-rate mortgages in Canada are compounded semi-annually by law, so use C/Y = 2 for a Canadian fixed mortgage.
• Payments at start or end: most loans and mortgages are paid at the end of each period. Regular contributions you make at the start of each month, such as an automatic RRSP or TFSA deposit, earn a little more interest, so choose Start for those.

Worked examples

• Growing a TFSA: you start with $5,000 and add $300 a month for 15 years at 5% a year. Set P/Y and C/Y to 12, then enter N = 180, I/Y = 5, PV = -5000 and PMT = -300, and solve for FV. You would have about $90,755.
• Car loan payment: you borrow $25,000 for 5 years at 7.5%. Set P/Y and C/Y to 12, then enter N = 60, I/Y = 7.5, PV = 25000 and FV = 0, and solve for PMT. The payment is about $500.95 a month.
• Mortgage payment: a $500,000 mortgage over 25 years at 4.5% fixed. Set P/Y to 12 and C/Y to 2, then enter N = 300, I/Y = 4.5, PV = 500000 and FV = 0, and solve for PMT. The payment is about $2,767 a month.
• Time to reach a goal: you have $10,000 and add $500 a month at 6% until you reach $100,000. Set P/Y and C/Y to 12, enter I/Y = 6, PV = -10000, PMT = -500 and FV = 100000, and solve for N. It takes about 120 months, or 10 years.

Why money today is worth more

The idea behind every calculation on this page is the time value of money: a dollar you have now is worth more than a dollar you will get later, because the dollar you have now can be invested and earn interest in the meantime.

Here is a simple example. Put $1,000 in an account that pays 5% a year and it grows to $1,050 after one year. Leave it for a second year and you earn 5% on $1,050, not just on your original $1,000, so you finish with $1,102.50. That extra $2.50 is interest earned on interest. Over 20 or 30 years, that compounding effect is what turns steady saving into real wealth.

The same idea works in reverse. Asking what $1,102.50 two years from now is worth today at 5% gives you $1,000. That is the present value, and it is how lenders, insurers and investors compare money received at different times.

Where this helps with your planning

• Seeing how regular contributions to an RRSP, TFSA, FHSA or RESP could add up over time.
• Comparing GIC rates with different compounding frequencies.
• Checking a loan, line of credit or investment loan payment before you sign.
• Estimating how much you need to save each month to reach a retirement or education goal.

Frequently asked questions