Time Value of Money Calculator
A dollar today is worth more than a dollar later, because today’s dollar can earn. This calculator solves both directions: what money grows into (future value) and what a future amount is worth now (present value).
$10,000 today at 7% for 20 years grows to $40,387 with monthly compounding — and, flipped, $40,387 received in 20 years is worth $10,000 today at that discount rate. That exchange rate across time is the time value of money.
- FV of $10,000, 7%, 20 yrs$40,387
- PV of $100,000 in 20 yrs @ 7%$24,760
- Rule of 72Money doubles in ~72 ÷ rate years
- Compounding usedMonthly
Computed with the standard TVM formulas shown below.
The two formulas
Future value: FV = PV × (1 + r/12)12t + PMT × [((1 + r/12)12t − 1) ÷ (r/12)]. Present value just inverts it: PV = FV ÷ (1 + r/12)12t. Everything in finance — bond prices, mortgage payments, retirement targets, NPV — is one of these two moves dressed up.
| $10,000 becomes… | at 4% | at 7% | at 10% |
|---|---|---|---|
| in 10 years | $14,908 | $20,097 | $27,070 |
| in 20 years | $22,226 | $40,387 | $73,281 |
| in 30 years | $33,135 | $81,165 | $198,374 |
Monthly compounding. The gap between columns is why the rate assumption dominates every long-horizon plan.
Frequently asked questions
What is the time value of money in one sentence?
Money available now is worth more than the same amount later, because now-money can be invested to earn a return.
What discount rate should I use for present value?
Your realistic opportunity cost: a risk-free Treasury yield for safe comparisons, your expected portfolio return (~6–8% nominal) for investment decisions, or a loan's APR when comparing against paying it off.
Does compounding frequency matter much?
Less than people think at typical rates: 7% compounded monthly yields an effective 7.23% annually vs 7.00% annually-compounded. Our EAR calculator quantifies exactly this.
What's the Rule of 72?
Divide 72 by your annual rate to approximate doubling time — at 8%, money doubles roughly every 9 years.
Sources & methodology
Sources: NumberBench methodology.
Results update as you type and are general estimates, not financial advice.