Engineering ToolBox - Resources, Tools and Basic Information for Engineering and Design of Technical Applications!

# Present Value

## The value of money in the future is the Present Value.

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".

### Example - Present Value

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

P = (7) / (1 + 0.05)10

= 4.30

## Related Topics

• ### Economics

Engineering economics - cash flow diagrams, present value, discount rates, internal rates of return - IRR, income taxes, inflation.

## Related Documents

• ### Cash Flow Diagrams

The future value of money.
• ### Compound Interest Tables

Compound interest tables - interests rates 0.25 - 60%.
• ### Discrete Compounding Cash Flow Formulas

Discrete payments compounding equations and online calculators .
• ### Interest Formulas

Future value of single cash flow.
• ### Interest Rate

Interest rate is the cost of money.
• ### Internal Rate of Return - IRR

Internal Rate of Return (IRR) - the break-even interest rate.
• ### Net Present Worth (NPW) of a Cash Stream

The value of a stream of payments is called the Net Present Worth (NPW).
• ### Uniformat

The ASTM E1557 UNIFORMAT II Standard.
• ### Value Engineering

Improved value by enhanced function.

## Search

Search is the most efficient way to navigate the Engineering ToolBox.

## Engineering ToolBox - SketchUp Extension - Online 3D modeling!

Add standard and customized parametric components - like flange beams, lumbers, piping, stairs and more - to your Sketchup model with the Engineering ToolBox - SketchUp Extension - enabled for use with older versions of the amazing SketchUp Make and the newer "up to date" SketchUp Pro . Add the Engineering ToolBox extension to your SketchUp Make/Pro from the Extension Warehouse !

We don't collect information from our users. More about

## Citation

• The Engineering ToolBox (2008). Present Value. [online] Available at: https://www.engineeringtoolbox.com/discount-rate-d_1232.html [Accessed Day Month Year].

Modify the access date according your visit.

12.8.9