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What is the correct formula for calculating the present value of an investment?

User Trez
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1 Answer

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Vn = V0(1+i)n

Vn = Value of cash flow at time n, Vo = Value of cash flow today, i = Interest Rate, n = t.

Above is the more accurate version of the formula, but you can also use this:

PV = FV x (1+i) ^ n

Where PV = present value, FV = future value, i = interest rate (as a decimal, 8.45% = 0.0845), n = the number of periods.


User Pheonyx
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