Principal or present value of an annuity ordinary (periodic payment,periodic interest rate,number of periods)

Formula

Principal or present value of an annuity ordinary (periodic payment,periodic interest rate,number of periods) formula
P
principal or present value of an annuity at time=n
R
periodic payment,amortized payment,amount of cash flows
n
number of periods
i
interest rate per period or required rate of return

Formula description

Present value, also known as present discounted value, is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk. This formula is used to calculate the present value P of an annuity of n payments of R each, paid at the end of each investment period into an account that earns interest at the rate of i per period.

Calculator (how to use calculator?)

Principal or present value of an annuity ordinary (periodic payment,periodic interest rate,number of periods) formula
R
n
i
P
Precision

Formula code

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References

  1. Wikepedia: Present value.
  2. Wikepedia: Annuity (finance theory).

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