Present Value
The value of money in the future is the 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".
Present Value - Online Calculator
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
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Economics
Engineering economics - cash flow diagrams, present value, discount rates, internal rates of return - IRR, income taxes, inflation.
Related Documents
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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.
