The Interest Rate for Future Value equation computes the annual fixed compounding interest rate needed to achieve a Future Value based on a Present Value and number of periods (e.g., months).
INSTRUCTIONS: Choose units and enter the following:
- (PV) Present Value, the initial value prior to compounding interest
- (FV) Future Value, the ending value after compounding interest
- (n) Number of periods compounding interest
Annual Interest Rate (i): The calculator returns the fixed annual interest rate as a percentage.
The Math / Science
The formula for the fixed interest rate is:
` i = ((FV) / (PV))^(1/n) -1`
where:
- i = Fixed Interest Rate
- FV = Future Value
- PV = Present Value
- n = Number of Periods
The reported interest is based on monthly compounding periods and is multiplied by 1200 inside this formula to provide the user with the interest rate as an annual percentage.
Basic Investor Calculators
- Black-Scholes Equation: Compute the Call and Put Option based on the Black-Scholes equation and the stock or spot price, strike price, number of years to maturity, percent volatility and the risk-free rate.
- 30 Day Yield Equation: Computes the SEC's 30 day yield function for bond funds based on the income in the prior 30 days, accrued expenses in the prior 30 days, outstanding shares and max price per share.
- Investment Return Rate: Computes the return rate based on the beginning and end price and dividends paid.
- Inflation Adjusted Return: Computes the return rate based on the Inflation Rate and the Investment Return.
- Present Value- computes the present value of a fixed annuity.
- Future Value- computes the future value of a fixed annuity.
- Interest Rate for Future Value - computes the annual fixed interest rate required for a present value to accrue to the future value over a number of periods.
- Number of Periods Required - computes the number of periods required to achieve a future value from a present value at a fixed annual interest rate.
- Precious Metal Value - computes the current market value of gold, platinum, silver and palladium based on bullion weight and purity.
- Currency Conversion - computes the current value of a currency amount (e.g., $2,000 US dollars) in Euros, Great Britain Pounds, Canadian Dollars, Yuan, Yen, Rubbles, Swiss Francs, Australian Dollars, South African Rands, Brazial Reals, Mexican Pesos, Indian Rupees and U.S. dollars.