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For example, a sum of FV to be received in one year is discounted (at the rate of interest r) to give a sum of PV at present: PV = FV — r·PV = FV/(1+r).
Some standard calculations based on the time value of money are:
Present Value (PV) of an amount that will be received in the future.
Present Value of a Annuity (PVA) is the present value of a stream of (equally-sized) future payments, such as a mortgage.
Present Value of a Perpetuity is the value of a regular stream of payments that lasts "forever", or at least indefinitely.
Future Value (FV) of an amount invested (such as in a deposit account) now at a given rate of interest...
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Common topics in this essay:
- Consumer price Index
- Gas And Oil Inflation And What Gov'T Can Do
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- Inaccuracies Of The Consumer Price Index(cpi)
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