Rupee Rubric Rupee Rubric

Tool

Time Value of Money Calculator

₹1 lakh today and ₹1 lakh in ten years are not the same thing: invested at 12% the first one becomes ₹3.1 lakh, and inflation quietly shrinks the second. Time value of money is the arithmetic for comparing rupees at two different dates, and every SIP, EMI and retirement plan is a version of it.

Pick the thing you don't know — what it grows to, what you need today, how long it takes, the return you're getting, how much per month — fill in the rest, and this works out the blank for a lump sum, a monthly amount, or both together. Hover the ? on any field if you're unsure what to enter. The full explanation is below — including PV, FV, N, I/Y and PMT spelled out if you're studying finance.

What do you want to work out?

Period type ? Whether the periods and amounts above are monthly or yearly. Monthly fits SIPs and EMIs; annual fits lump sums and once-a-year deposits like PPF.
How many months · N ? How long the money stays put. In monthly mode this is a count of months — a 10-year SIP is 120; in annual mode it is years. Textbooks call it N.
Return per year (%) · I/Y ? The return you expect each year, or the interest rate on a loan. Always enter it as a yearly figure even in monthly mode. Indian equity has done ~12% long-term, FDs about 7%. Written I/Y.
Amount you have today (₹) · PV ? The lump sum you are starting with today — ₹1 lakh already invested, or the loan amount you are borrowing. Put 0 if you are starting from nothing. This is the present value, PV.
Added each month (₹) · PMT ? The equal amount that goes in every period: a monthly SIP, an EMI, a rent cheque. Put 0 if there is nothing recurring. This is the payment, PMT.
What it grows to
—
Growth on top
—
—
Total Invested ? Your own money going in — the starting lump sum plus every instalment. Nothing the market added is counted here.
—
Return Multiple ? The end amount divided by what you put in. 3× means every rupee you invested came back as three.
—
Annual Rate ? The rate being used, stated per year, so a monthly calculation can be compared with an annual one.

Uses end-of-period (ordinary annuity) convention. Rate is compounded per period — annual rate ÷ 12 in monthly mode. Results are illustrative; actual investment returns vary.

What is Time Value of Money?

The foundation of all financial thinking: ₹1 lakh today is worth more than ₹1 lakh a decade from now. There are two reasons. First, money you have today can be invested — ₹1 lakh earning 12%/year becomes ₹3.1 lakh in 10 years. Second, inflation erodes purchasing power — ₹1 lakh in 2035 will buy less than ₹1 lakh today. TVM is the framework that connects money across time.

Every financial decision reduces to a TVM calculation: how much to SIP to reach a goal, whether a loan is worth taking, how long until you can retire, what a business investment is actually worth today. The TVM calculator above is the Swiss Army knife for all of these.

The five TVM variables

Give any four, solve for the fifth:

  • N — Number of Periods: Duration of the investment or loan. In monthly mode this is months; in annual mode, years. A 10-year SIP = N 120 (monthly) or N 10 (annual).
  • I/Y — Interest or Discount Rate: Always entered as annual percentage — e.g., 12 for 12%/year. The calculator converts to per-period rate internally (divides by 12 in monthly mode). This represents either the return you earn or the cost of borrowing.
  • PV — Present Value: Lump-sum amount at time zero — what something is worth today. A ₹1 lakh investment you make now: PV = 1,00,000. For a home loan of ₹50 lakhs: PV = 50,00,000.
  • PMT — Payment per Period: Equal, recurring cash flows — a monthly SIP, an EMI, an annuity payment, rental income. If there are no periodic flows, set PMT = 0. This is what distinguishes a TVM calculator from a simple compound interest calculator.
  • FV — Future Value: The value at the end of N periods. What your corpus grows to, or what you owe at loan maturity. Set FV = 0 for a standard amortising loan (pays to zero).

The formula

TVM — Future Value (ordinary annuity) FV = PV × (1 + r)n + PMT × [(1 + r)n − 1] ÷ r
Variables: r = per-period rate (annual ÷ 12 for monthly), n = total periods

Worked example (default): ₹1,00,000 lump sum + ₹5,000/month for 120 months at 12%/year
r = 12% ÷ 12 = 1%/month (0.01), n = 120 months
FV = 1,00,000 × (1.01)120 + 5,000 × [(1.01)120 − 1] ÷ 0.01
= 1,00,000 × 3.300 + 5,000 × 230.04
= ₹3,30,039 + ₹11,50,193 = ₹14,80,232

Total invested: ₹1,00,000 + (₹5,000 × 120) = ₹7,00,000. Returns earned: ₹7,80,232.

When to use each solve mode

  • Solve for FV — Goal sizing: "I invest ₹2 lakh today + ₹15,000/month for 15 years at 11% — what's my final corpus?"
  • Solve for PV — Lump-sum planning: "I need ₹50 lakhs in 10 years at 10% with no SIP — how much to invest today?"
  • Solve for N — Time horizon: "At ₹8,000/month into a ₹2 lakh corpus at 12%, how many months to reach ₹1 crore?"
  • Solve for I/Y — Return check: "I put in ₹5 lakh total over 7 years and now have ₹18 lakh — what annual rate did I actually earn?"
  • Solve for PMT — Required SIP: "I need ₹1 crore in 20 years, have ₹2 lakh today, at 12% — what monthly SIP do I need?"

Frequently Asked Questions

What's the difference between TVM and CAGR?

CAGR is a special case of TVM with PMT = 0 — it measures compound annual growth on a single lump sum. TVM is more general: it handles both lump sums and periodic payments (annuities like SIPs). For a mutual fund holding with no ongoing investments, CAGR works. For an SIP portfolio with regular contributions, you need TVM — or XIRR for irregular cash flows.

Why does PV + PMT × N not equal FV?

Because of compounding. Your ₹1 lakh invested today starts earning returns immediately, and those returns compound further. Each ₹5,000 SIP also starts compounding from the moment it's invested. In the default example, you invest ₹7 lakh in total but end up with ₹14.8 lakh — the extra ₹7.8 lakh was generated purely by the compounding of returns over 10 years, not from your pocket.

What annual rate should I use for Indian investments?

Benchmarks: FD 6.5–7.5%, PPF 7.1%, debt mutual funds 7–8%, balanced advantage funds 10–11%, large-cap equity/Nifty index 11–13% (long-run historical). For conservative planning, use 10% for equity SIPs — slightly below the historical Nifty 50 CAGR of ~13% to account for costs, taxes, and bad decades.

What is an annuity, and when does PMT matter?

An annuity is any series of equal, periodic cash flows: a monthly SIP, an EMI, rental income, pension payments. PMT captures these. If you make a one-time investment with no ongoing additions, set PMT = 0 — the formula simplifies to FV = PV × (1+r)n. A home loan is a TVM problem with PV = loan amount, FV = 0, PMT = negative EMI, and N = tenure in months.

Use this calculator on your site

Free embed for blogs and client pages — one line of HTML, no signup.

→