Present Value (PV)
Compare with future value
A dollar you receive in the future (future value) is not as valuable as a dollar you have today. That's because the dollar you have now can be invested to earn interest. The process of converting a future dollar into a current dollar is called discounting.
(1)\begin{align} Present Value = \frac{Future Value }{{(1+i)}^{n }} \end{align}
(2)
\begin{align} Future Value = Present Value \times {(1+i)}^{n} \end{align}
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page revision: 8, last edited: 07 Jul 2007 17:47
