Time Value of Money Concepts Copyright © 2002-2008 by David R. Frick & Co., CPA
 Quick Reference: TVOM Formulas

VARIABLES

Compound Interest

• PV - present value
• FV - future value
• i - interest rate (the nominal annual rate)
• n - number of compounding periods in the term
• PMT - periodic payment
• m - compounding frequency (compounding intervals per year)
• Y - number of years in term

Simple Interest

• P - principal (analogous to PV)
• S - amount (analogous to FV)
• r - interest rate (analogous to i)
• t - time (analogous to n)
• I - interest earned

SIMPLE INTEREST

Present Value (PV) - Simple Interest

(1.01)

Discount Factor - Simple Interest

(1.02)

Future Value (FV) - Simple Interest

(1.03)

Accumulation Factor - Simple Interest

(1.04)

Simple Interest Amount (I)

(1.05)

Time - Exact (t)

(1.06)

Time - Ordinary (t)

(1.07)

SINGLE SUM

Present Value (PV) - Single Sum

(2.01)

Discount Factor - Compound Interest

(2.02)

Continuous Compounding (PV) - Present Value

(2.03)

Future Value (FV) - Single Sum

(2.04)

Accumulation Factor - Compound Interest

(2.05)

Continuous Compounding (FV) - Future Value

(2.06)

Number of Periods (n) - Single Sum

(2.07)

Interest Rate (i) - Single Sum

(2.08)

ANNUITY

Present Value (PV) - Ordinary Annuity

(3.01)

Number of Periods (n) - Present Value of Annuity

(3.02)

Payment (PMT) - Present Value of Annuity

(3.03)

Interest Rate (i) - PV Annuity

(3.04)

Future Value (FV) - Ordinary Annuity

(3.05)

Number of Periods (n) - Future Value of Annuity

(3.06.)

Payment (PMT) - Future Value of Annuity

(3.07)

Interest Rate (i) - FV Annuity

(3.08)

Annuity Due

(3.09)

Perpetuity (PV Annuity)

(3.10)

INTEREST RATE

Interest Rate (i) - Effective

(4.01)

Continuous Compounding (i) - Max Effective Interest Rate

(4.02)

ALGEBRA

Natural Logarithm - Base Identity

(5.01)

Natural Logarithm - Inverse

(5.02)

Exponential Equation

(5.03)

Fractional Exponent

(5.04)

Receiprocal Exponent

(5.05)

BONDS

Yield on Discount Basis (YDB)

(6.01)

Bond Equivalent Yield (BEY) for t <= 182

(6.02)