17

Miscellaneous Programs and Equations

Time Value of Money

Given any four of the five values in the "Time–Value–of–Money equation" (TVM), you can solve for the fifth value. This equation is useful in a wide variety of financial applications such as consumer and home loans and savings accounts.

The TVM equation is:

 

 

 

 

N

+ F(1+ (I 100))N + B = 0

P1(1+ I 100)

I 100

 

Balance, B

 

 

Payments, P

 

1

2

3

N_1

N

Future Value, F

The signs of the cash values (balance, B; payment, P; and future balance, F) correspond to the direction of the cash flow. Money that you receive has a positive sign while money that you pay has a negative sign. Note that any problem can be viewed from two perspectives. The lender and the borrower view the same problem with reversed signs.

Miscellaneous Programs and Equations 17-1

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HP 35s Scientific manual Miscellaneous Programs and Equations, Time Value of Money, TVM equation is