present value table pdf


How do you use a present value table?

    Definition: A present value table is a tool that helps analysts calculate the PV of an amount of money by multiplying it by a coefficient found on the table. In other words, it is a table that illustrates the different coefficients that can be used to calculate a figure’s present value depending on the discount rate and period of time used.

What is the present value formula?

    The present value formula consists of the present value and future value related to compound interest. The present value or PV is the initial amount (the amount invested, the amount lent, the amount borrowed, etc). The future value or FV is the final amount. i.e., FV = PV + interest.

How do you calculate the present value of an annuity?

    The present value of annuity formula is calculated by determining present value which is calculated by annuity payments over the time period divided by one plus discount rate and the present value of the annuity is determined by multiplying equated monthly payments by one minus present value divided by discounting rate.

What is the present value of $10,000?

    In other words, the present value of $10,000 in this situation is $6,139.13. Why Is It Important? Present value is the heart of finance. It dictates banking, insurance, stock pricing, financial modeling, and much more. It's an important concept to individuals, but it is even more critical in a business scenario.
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Appendix: Present Value Tables

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