Annual Value at the Present

The current value of all future revenue received by this

investment is the actual value of a renewal. In more
practical terms, it is the amount of money required to
earn a specific amount of money today.

Using the interest, target payment amount, and number

of payments, the present value calculation reduces the
value of future payments to estimate the contribution
required to achieve and sustain fixed payments over a
set period.

For example, if you want to make $1,000 monthly

payments for the next ten years, you may use the
present-value calculation to determine how much you
should invest now. If you want a $1,000 annuity
payment in ten years at 8%, you'll need to put down $
today.