meta numerics

This calculator allows you to model the evolution of an investment or a debt.

 P1 Initial balance r Rate % / year bp p Payment / month / year t Time months years P2 Final balance

To use this calculator, select a variable to be computed, then enter values for the other variables. The computed variable will automatically update as other variables are changed.

For example, to model the growth of an investment, enter the initial deposit (which may be zero), the rate of return (which may be zero, or even negative if your investment looses money), your regular contribution (which may be zero, or even negative if you regularly withdraw), and the time of the investment. Then select the final balance button to calculate the value of your investment after the elapsed time. Alternatively, you may know the final balance you wish to achieve, but want to compute the rate of return, time, or regular payment required to achieve it. In those cases, simply select the button next to the variable you want to calculate and enter values for the other variables.

You can also use this calculator to model the repayment of a debt, such as a mortgage or a car loan. There are two entirely equivilent ways to do this: (1) Model the debt as a negative initial deposit, and your payments as positive payments against it. (2) Model the debt as a positive balance, and your payments as negative payments against it. In either case, the debt is payed off when the final balance is zero.

The calculator assumes continuously compounded yields and continuous payments. These approximations are very accurate in most practical circumstances (essentially, whenever the elapsed time includes a large number of payment cycles).