Present Value Calculation

Below is an example of the present value calculation. You can use the present value formula for present value calculations. If you don't want to do the present value calculation by hand, you can always use the present value calculator, free online.

Present value calculation e.g.

What is the present value of $1,000 receivable 5 years from now given that money can be invested at 10% p.a.?

Answer to the Present Value calculation problem

Using the present value formula:

We have:

OR