# Present Value

## The Present Value of money in the future

The value of money in the future can be calculated to Present Value or Present Worth with the "*discount rate*" as

P = F / (1 + i)^{n}(1)

where

F = future cash flow (positive for receipts, negative for disbursements)

P = present value

i = discount rate

n = number of interest periods

The factor *"1 / (1 + i) ^{n}"* is known as the "

*single payment present worth factor*".

### Present Value - Online Calculator

### Example - Present Value

The present value of a future cash flow of an amount of *7* in period * 10* with discount rate *5% (i = 0.05)* can be calculated as

P = (7) / (1 + 0.05)^{10}

^{ }= 4.30

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