Invest or pay any amount. On any date. At any rate.

Tutorial 2

**This tutorial takes you through the steps to calculate the future value of a series of regular investments.** The previous tutorial introduced you to time value of money calculations for a loan cash flow. Among the second group of financial calculations performed by the TVM Calculator are those involving investment or savings cash flows.

This example applies to our online Time Value of Money Calculator. The C-Value! program for Windows works in a similar way and has a few more features including the ability to save your work.

All users should work through the first tutorial to understand basic concepts about the TVM calculator.

Broadly speaking investment and savings cash flows will fall into **one of four groups** with the following characteristics:

- A series of deposits followed by one withdrawal. A defined
**savings plan**to reach a specific goal can typically be represented by this cash flow pattern (this tutorial). - The second type of cash flow assumes one initial deposit (investment) followed by a series of withdrawals. An
**annuity**purchased for retirement is typically represented by this pattern. - The third type involves multiple investments and multiple withdrawals. The classic example for this investment type is a
**college or retirement plan**. - The final type is a completely random pattern. Multiple investments (deposits) with intermittent returns (withdrawals).
**Stock, bond or mutual fund investing**is representative of this cash flow pattern.

The Time Value of Money Calculator can easily handle any of these cash flow patterns as well as variations of each pattern.

**To create a savings plan schedule with an unknown withdrawal amount, assuming 10 years of quarterly deposits, follow these steps:**

- Set "Schedule Type" to "
**Savings**"- Or click the [Clear] button to clear any previous entries.
- The top two rows of the grid will not be empty
- Delete the 2nd row by selecting it and clicking on the [Delete] button

- Set initial values for an investment cash flow in the header area.
- Both interest rate and compounding can be changed on later dates (see tutorial #4)

- For "Initial Interest Rate", enter
**4.5**for 4.5% - Set "Initial Compounding" to "
**Daily**". - For "Calculate Method" select "
**Normal**".

- Click on row one of the cash flow grid
- Set the "Series" to "
**Deposit**" - Set the "Date" to
**04/01/2016**(mm/dd/yyyy) - Set the "Amount" to
**350.00** - Set the "# Periods" to
**40** - Set the "Frequency" to "
**Quarterly**".

- Set the "Series" to "

- Create a "Withdrawal" series in row two to calculate future investment value.
- This tells the calculator to calculate the final withdrawal amount
- You can set the withdrawal date farther into the future if you want to withdrawal the balance sometime after the investments stop

- Click on the second grid row. For "Series" select "
**Withdrawal**" - The "Date" will already be set to
**04/01/2026** - Set the "Amount" to "
**Unknown**" by typing "U" - Set the "# Periods" to
**1**

We are now ready to calculate the unknown value. Your screen should look like this:

- Calculate — Click on the [Calculate] button at the top of the calculator
- The word "Unknown" will be replaced with the savings value as of 04/01/2026. Assuming you are using the standard default settings and entered the example as shown, the result will be
**$17,843.48** - Thus the depositor will have
**$17,843.48**available for withdrawal after investing $350.00 every quarter for ten years assuming a 4.5% nominal annual interest rate, daily compounding when using a "Normal" compute method and a 360 day year

- The word "Unknown" will be replaced with the savings value as of 04/01/2026. Assuming you are using the standard default settings and entered the example as shown, the result will be

- Click the "Schedule" button to see the investment cash flow schedule.

- Finally, don't forget to click on the "Charts" tab to view a series of 3 charts that lets you visualize your savings plan. The charts are automatically prepared. There is nothing to configure or enter.

Variations: If you know the regular deposit amount and the amount that will be available for withdrawal and what date the funds will be available, then you can set the "Initial Interest Rate" to "Unknown" to calculate the nominal annual interest rate required

You may also solve for the "# Periods". Solving for the "# Periods" in the first row by setting it to "Unknown" will allow you to calculate the number of periods that are required to reach an investment goal. But there is a caveat. If you set up the second row with a date that does not allow enough periods to reach the goal (the "goal" is the withdrawal amount you enter in row two), then the TVM calculator will allow the withdrawal on the date requested but the balance will go negative. The ongoing deposits are in essence paying back a loan until the balance is 0.

Note: If you apply the principles illustrated in other examples to this example, you can adjust the deposit amount and even the assumed interest rate. Furthermore, you can change the deposit dates, add adjustments for inflation or skip deposits (see "Cash Flow Options").

There are dozens of financial calculators hosted by this site. If the Time Value of Money Calculator doesn't meet your needs or if you have a question about how to set up a mortgage, loan or investment calculation, please express your concerns or ask your question in the comment section at the bottom of any calculator page.