All the financial calculations in finance are based upon compounding rates. In addition, Time value of money has applications in many areas of finance including capital budgeting, bond valuation, and stock valuation. Future value describes the process of finding what an investment today will grow to in the future. This is called compounding. Present value describes the process of determining what a cash flow to be received in the future is worth in today's dollars. This is referred to as discounting. Therefore time value of money calculations finds the value of present value which is equal to the future value at a given interest rate and number of periods of time.
Calculator Tutorials for the TI-84
Excel and HP10B-II Tutorials
Calculator Tutorials for the BA-II
Even though most financial calculations can be accomplished using basic math and elementary algebra, it is recommended you use a good calculator, app, or an Excel spreadsheet. Here are a few methods to calculate time value of money problems.