# How do you calculate discounted present value?

## How do you calculate discounted present value?

Discount Rate Formula

2. Let us take a simple example where a future cash flow of \$3,000 is to be received after 5 years.
3. Solution:
4. Discount Rate = (Future Cash Flow / Present Value) 1/ n – 1.

## What is the approximate present value of receiving \$10000 per year for 10 years if the first receipt is 5 years from today and interest is discounted at 16% annually?

We see that the present value of receiving \$10,000 five years from today is the equivalent of receiving approximately \$7,440.00 today, if the time value of money has an annual rate of 6% compounded semiannually.

## What is a discount rate in present value?

The discount rate is the investment rate of return that is applied to the present value calculation. In other words, the discount rate would be the forgone rate of return if an investor chose to accept an amount in the future versus the same amount today.

## What is the present value of \$100000 to be received in 15 years with an annual discount rate of 5 %? This amount is discounted monthly?

Question: 9. What is the present value of \$100,000 to be received in 15 years with an annual discount rate of 5%? This amount is discounted monthly. the answer is \$47,310 I want to know how to do the work 10.

## How do you calculate lump sum?

The formula to calculate compound interest for a lump sum is A = P (1+r/n)^nt where A is future value, P is present value or principal amount, r is the interest rate, t is the number of years the money is deposited for and n is the number of periods the interest is compounded each year.

## What is the present value of\$ 120?

That is to say, the present value of \$120 if your time-frame is 3 years and your discount rate is 10% is \$90.16. For the above problem, your sum would be \$133.10. Here’s how the math works out:

## How to calculate the present value of a future id?

The amortization table of future value Year ID Year Value changed since previous year due to Total value 2036 N/A 100,000.00 1 2035 −5,660.38 94,339.62 2 2034 −5,339.98 88,999.64 3 2033 −5,037.72 83,961.93

## How to calculate a discounted present value calculator?

The currently calculated annual payment is the minimal required annual contribution to save 100,000.00 in 15 years based on the 6% annually-compounded discount rate. The currently calculated monthly payment is the minimal required monthly contribution to save 100,000.00 in 180 months [or 15 years] based on the 0.5% monthly-compounded discount rate.

## Which is the correct formula for present value?

The general solution comes in this formula: The present value formula for annual (or any period, really) interest. i = Interest rate (where ‘1’ is 100%) In the simplest case, let’s say you’re an excellent investor and can get a 10% return on your money. You have \$100 today, and you stay invested for three years: