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The present value factor is the exponent of the future value factor. this is the relationship between Present Value and Future Value.
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The present value is the reciprocal of the future value.
Future Value = Value (1 + t)^n Present Value = Future Value / (1+t)^-n
The Present Value Interest Factor PVIF is used to find the present value of future payments, by discounting them at some specific rate. It decreases the amount. It is always less than oneBut, the Future Value Interest Factor FVIF is used to find the future value of present amounts. It increases the present amount. It is always greater than one.
Present Value ------------------- You know what something WILL be worth in the future, and you want to find out what it should sell for today. Future Value ------------------- You know how much something is worth now, and you want to find out what it will be worth in the future.
Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.
Present value annuity factor calculates the current value of future cash flows. The present value factor is used to describe only the current cash flows.
1 Bahraini Dinar = 118 Indian Rupees on 24/7/11
I need a answer how do you know when to use future value or present value and future value of a annuity and present value of annuity Please help
What effect do interest rates have on the calculation of future and present value, how does the length of time affect future and present value, how do these two factors correlate.
F = Future value P = Present Value i = Intrest Rate n = no. of years Therefore, the formula for future value of present amount :- F= P (1+i)n