Present Value

The present value v_n of a single payment made at n periods in the future is


where n is the number of periods until payment, p is the payment amount, and r is the periodic discount rate. The present value v_infty of equal payments made each successive period in perpetuity (a.k.a. the present value of a perpetuity) is given by


The present value v^' of equal payments made each successive period for n periods (a.k.a. the present value of an annuity) is given by


where p is the periodic payment amount.

See also


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Cite this as:

Weisstein, Eric W. "Present Value." From MathWorld--A Wolfram Web Resource.

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