Time Value of Money: Formula

Present Value

FV
PV =
1. i n∗m ---PV with Single Amount
(1+ )
m
CF 0 CF 1 CF n
2. PV = 0
+ 1
+… … … … … …+ n−1 ---PV Mixed Stream (Beginning)
(1+i) (1+i) (1+i)
CF 1 CF 2 CF n
3. PV = 1
+ 2
+ … … … … … …+ n ---PV Mixed Stream (Ending)
(1+i) (1+i) (1+i)
1
1−
i n∗m
(1+ )
4. m ---Present Value of Ordinary Annuity
PV OA=CF∗⌊ ⌋
i
m
1
1−
i n∗m
(1+ )
5. m i m ---Present Value of Annuity Due
PV AD=CF∗⌊ ⌋∗(1+ )
i m
m

Future Value

i n∗m
6. FV =PV∗(1+ ) ---FV with Single Amount
m
7. FV =CF 0∗(1+i)n−0+ CF 1∗(1+i)n−1 +… … … … …+CF n∗(1+ i)n−(n−1) --FV Mixed Stream
(Beginning)
8. FV =CF 1∗(1+i)n−1 +CF 2∗(1+i)n−2+ … … … … …+CF n∗(1+i)n−n --FV Mixed Stream
(Ending)
i n∗m
(1+ ) −1
m
9. FV OA=CF∗⌊ ⌋ ---Future Value of Ordinary Annuity
i
m

i n∗m
(1+ ) −1
m i m
10. FV AD=CF∗⌊ ⌋∗(1+ ) ---Future Value of Annuity Due
i m
m
Effective Interest Rate

i n∗m
11. EIR=(1+ ) −1+ f
m