Time Value of Money Concepts and Calculations

Free CFP Exam lesson in General Principles of Financial Planning. 21 min read, ~3,159 words.

Every TVM problem has five variables (PV, FV, N, I/Y, PMT); know four, solve for one. Ordinary annuity = end of period; annuity due = beginning. Wrong mode gives an answer off by exactly (1 + r). Real rate = (1 + nominal) / (1 + inflation) - 1, always...