This is a tool that enables you to calculate one of the factors associated with the time value of a single amount of money: the future value, the present value, the annual interest rate or the term for the value change. For example, the tool could be used to calculate the time needed or the interest rate required to double your investment.

The tool is multi-directional and, therefore, determines the information that needs to be calculated based on which data has been entered. In other words, if three out of the present value, the term, the annual interest rate or the future value are entered, the tool calculates the remaining one. When further data changes are made, the tool re-calculates the same time value factor unless that factor is itself changed or a different data field is cleared.

In more detail, the information that can be entered and/or calculated is:

• The present value of the amount.
• The term, i.e. the time between the present and future values. This can be expressed in years, months, weeks or days.
• The annual interest rate, which can be entered as either a nominal (default) or effective rate. If it is a nominal annual rate then it is used together with the compounding frequency to determine the interest rate applied per compounding period. An effective annual rate, on the other hand, is a rate that has already factored in the periodic compounding to give a rate equivalent to interest being compounded annually, and thus does not need compounding frequency for the tool calculation. On the tool form, the rate is usually expressed in percentage terms (unless the formatting is explicitly set to express it as a decimal).
• The compounding frequency, which specifies how often interest is compounded per year. The possible values for the compounding frequency are annual (default), semiannual, quarterly, monthly, weekly, daily or continuous. The compounding frequency is only important if a nominal annual interest rate is given, since an effective annual rate has already taken the periodic compounding into account.
• The future value of the amount.

Associated tool link: http://www.coggit.com/tools/time_value_of_a_single_amount.html