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.
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.
The present value is the reciprocal of the future value.
PVIF (Present Value Interest Factor) is a table which shows the present value of sum which will be realiseed in the future. PVIFA (Present Value Interest Factor of Annuity) is similar to a PVIF but tailored to one or a group of Annuities.
Future Value = Value (1 + t)^n Present Value = Future Value / (1+t)^-n
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
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
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.
the current dollar value of a future amount
The present value annuity formula is used to simplify the calculation of the current value of an annuity. A table is used where you find the actual dollar amount of the annuity and then this amount is multiplied by a value to get the future value of that same annuity.
Present Value Calculator Use this calculator to determine the present value of a stream of deposits plus a known final future value.