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Six Finance Factors

Enter an interest rate and number of years to compute all six finance factors at once: future value, present value, annuity future value, sinking fund, capital recovery, and annuity present value. Add an amount to see worked examples.

Input

%
yrs
$

Result

The six factors at 3% over 20 years

1.8061(Future value factor)

Future value factor

1.8061

Finds how much a current principal grows to after 20 years under compound interest.

Investing $1,000,000.00 now, the principal plus interest after 20 years is about $1,806,111.23

Present value factor

0.5537

Finds how much you need today to reach a target amount in 20 years.

To have $1,000,000.00 in 20 years, the principal needed today is about $553,675.75

Annuity future value factor

26.8704

Finds the total balance after 20 years when saving a fixed amount each year.

Saving $1,000,000.00 every year, the total after 20 years is about $26,870,374.49

Sinking fund factor

0.0372

Finds how much to save each year to reach a target amount in 20 years.

To reach $1,000,000.00 in 20 years, the yearly amount to save is about $37,215.71

Capital recovery factor

0.0672

Finds the yearly payout (or repayment) when drawing down a current principal.

Drawing down $1,000,000.00 over 20 years while invested, the yearly payout is about $67,215.71

Annuity present value factor

14.8775

Finds the principal needed today to receive a fixed amount each year for 20 years.

To receive $1,000,000.00 each year for 20 years, the principal needed today is about $14,877,474.86

How it works

  • From the interest rate r (as a decimal) and the number of years n, all six factors are computed at once. The future value factor is (1+r)^n and is used to find what a current principal grows to after n years under compound interest (principal x future value factor = future amount).
  • The present value factor is (1+r)^-n, the reciprocal of the future value factor. It finds how much principal you need today to reach a target amount in n years (target x present value factor).
  • The annuity future value factor is ((1+r)^n - 1) / r and finds the total after saving a fixed amount each year for n years (yearly contribution x annuity future value factor). The sinking fund factor is its reciprocal, r / ((1+r)^n - 1), and finds how much to save each year to reach a target amount in n years (target x sinking fund factor).
  • The capital recovery factor is r(1+r)^n / ((1+r)^n - 1) and finds the yearly payout (or repayment) when drawing down a current principal over n years while invested. The annuity present value factor is its reciprocal, (1 - (1+r)^-n) / r, and finds the principal needed today to receive a fixed amount each year for n years (yearly payout x annuity present value factor).
  • When the rate is 0%, the annuity future value and annuity present value factors equal n, and the sinking fund and capital recovery factors equal 1/n (no compounding, so the amounts split evenly). Enter an amount to also see worked examples that multiply each factor by that amount.
  • Each factor is shown rounded to five decimal places as an estimate. Real-world results are affected by taxes, fees, and rate changes, so these figures are a guide only. Make investment decisions at your own discretion.