Engineering ToolBox - Resources, Tools and Basic Information for Engineering and Design of Technical Applications!

This is an AMP page - Open full page! for all features.

• the most efficient way to navigate the Engineering ToolBox!

# Present Value

The value of money in the future can be calculated to Present Value or Present Worth with the "discount rate" as

P = F / (1 + i)n         (1)

where

F = future cash flow (positive for receipts, negative for disbursements)

P = present value

i = discount rate

n = number of interest periods

The factor "1 / (1 + i)n" is known as the "single payment present worth factor".

### Example - Present Value

The present value of a future cash flow of 7 in period 10 with discount rate 5% (i = 0.05) can be calculated as

P = (7) / (1 + 0.05)10

= 4.30

## Related Topics

### • Economics

Engineering economics - cash flow diagrams, present value, discount rates, internal rates of return - IRR, income taxes, inflation.

## Related Documents

### Cash Flow Diagrams

The future value of money.

### Compound Interest Tables

Compound interest tables - interests rates 0.25 - 60%.

### Discrete Compounding Cash Flow Formulas

Discrete payments compounding equations and online calculators .

### Interest Formulas

Future value of single cash flow.

### Interest Rate

Interest rate is the cost of money.

### Internal Rate of Return - IRR

Internal Rate of Return (IRR) - the break-even interest rate.

### Net Present Worth (NPW) of a Cash Stream

The value of a stream of payments is called the Net Present Worth (NPW).

### Uniformat

The ASTM E1557 UNIFORMAT II Standard.

### Value Engineering

Improved value by enhanced function.

## Search Engineering ToolBox

• the most efficient way to navigate the Engineering ToolBox!

## SketchUp Extension - Online 3D modeling!

Add standard and customized parametric components - like flange beams, lumbers, piping, stairs and more - to your Sketchup model with the Engineering ToolBox - SketchUp Extension - enabled for use with the amazing, fun and free SketchUp Make and SketchUp Pro . Add the Engineering ToolBox extension to your SketchUp from the Sketchup Extension Warehouse!