Future Value of a Single Cash Flow

FV = 500*(1+6%/2)^(2*3) = $597.03

We can also solve this problem using the calculator as follows:

Calculator Variables

The BA II Plus calculator has the following five variables for Time Value of Money (TVM) functions.

N = Number of Periods (mT in our formula)

I/Y = Interest Rate Per Year (r)

PV = Present Value

FV = Future Value

PMT = Payment

The calculations are simple; you input the values that you know, and calculate the unknown.

To assign a value to a TVM variable, key in the number and press a TVM key – N, I/Y, PV, PMT, and FV.

To change the number of payments (P/Y) press 2nd, key in the number and press ENTER.

To calculate the unknown value, press Compute (CPT) and then press the key for unknown variable.

In our above example, enter PV = 500, change P/Y = 2 (semi-annual compounding), I/Y = 6, N = 6.

Then press CPT > FV. We get:

FV = 597.026

Similarly we can calculate the Future Value for any compounding frequency.