What is time value of money?

Basic concept that money in the present is worth more than th

Time value of money is sometimes referered as Net Presenet
The reasoning is that your current money has the potential to g

What are the two important aspects / reasoning behind Tim

Opportunity Cost
Opportunity cost is the potential forgone profit from a m
Money on hand can be used for various purposes, where as t
Opportunity costs represent the potential benefits that an
investor, or business misses out on when choosing one altern

Inflation
The value of dollar today decreases over a period of time sinc
effectively decreasing the number of quantity of goods or ser

India's Inflation some recent data

What are the components of Time Value of Money ?

1/ Interest Rate / Discount Rate Compounding Rate / Disco

2/ Time Periods
3/ Present Value (PV)
4/ Future Value (FV)
5/ Installments (PMT)
6/+/-
Number of Periods - Annua
Amount that we can obtain
Amount that we can obtain
Represents payments to be
The value is positive when

Current Amount on hand

Interest 20%
Effect of Compounding
Future
Time / Period (Years) Value
1 1200.00
2 1440.00
3 1728.00
4 2073.60
5 2488.32
6 2985.98
7 3583.18
8 4299.82
9 5159.78
10 6191.74
11 7430.08
12 8916.10
13 10699.32
14 12839.18
15 15407.02

Summarizing

As per investopedia
The time value of money means that a sum of money is
The principle of the time value of money means that it ca
The formula for computing the time value of money cons
For savings accounts, the number of compounding perio
Inflation has a negative impact on the time value of mon

Inflation and Time value of money

The time value of money states that the value of money chan
A set amount of money today will have a different “purchasin
A simple example is this: imagine you’re given a certain amo
You could go to the mall and buy some clothes, say, 3 pairs of
BUT, if you put that $100 bill under your mattress, and bring it to the same m
This is because the price of jeans has increased because of infl
The “future value” of the money is different than the “presen
 t is worth more than the same sum of money to be received in future.
rered as Net Presenet Value NPV
ey has the potential to grow if you invest it or save it and earn interest.

reasoning behind Time value of money ?

gone profit from a missed opportunity

s purposes, where as the same amount to be received in future has lost the c
ntial benefits that an individual,
en choosing one alternative over another.

er a period of time since inflation increases the price of goods and services o
uantity of goods or services one can buy.
ue of Money ?

mpounding Rate / Discounting Rate

mber of Periods - Annual, Semi annual, quarterly, monthly, weekly, daily etc
ount that we can obtain / calculate by applying a a discount rate on on future
ount that we can obtain / calculate by applying a a compounding rate on pres
resents payments to be paid or received during each periods.
value is positive when payments are received or negative when payments ar

1000Present Worth
per annum
 Time value of Money
Interest 18000.00
16000.00
200.00 14000.00

240.00 12000.00
10000.00

288.00 8000.00
6000.00
345.60 4000.00

414.72 2000.00
0.00
0 2 4 6 8 10 12
497.66
597.20
Compouned Interest
716.64 3000.00
859.96 2500.00
1031.96 2000.00
1238.35
1500.00
1486.02
1000.00
1783.22
500.00
2139.86
0.00
2567.84 0 2 4 6 8 10 12

t a sum of money is worth more now than the same sum of money in t
oney means that it can grow only through investing so a delayed inves
value of money considers the amount of money, its future value, the a
 f compounding periods is an important determinant as well.
he time value of money because your purchasing power decreases as

he value of money changes with time.

a different “purchasing power” in the future.
re given a certain amount of money, say a $100 bill.
clothes, say, 3 pairs of jeans.
ss, and bring it to the same mall in 10 years from now, you would only be able to buy, say, 2 pair
creased because of inflation, and therefore the purchasing power of the $10
erent than the “present value” of the money.
 has lost the current best opportunity

and services over time

kly, daily etc
e on on future value sum of money or any cash flow
g rate on present value sum of money or cash flow

n payments are paid.

e of Money

8 10 12 14 16

ed Interest

8 10 12 14 16

of money in the future.

elayed investment is a lost opportunity.
value, the amount it can earn, and the time frame.
ecreases as prices rise.

o buy, say, 2 pairs of jeans.

wer of the $100 bill has decreased.
The Mechanics of Time value of money ?
Cash flows at different points in time cannot be compar
All cash flows have to be brought to the same point in time be
The process of discounting future cash flows converts them in
Conversely, the process of compounding converts present cash

Types of Cashflows
Simple Cashflows - Lumpsum , Uneven Cash flows
annuities
growing annuities
perpetutities
growing perpetuties

The general formula to calculate the time value of money cons

FV = Future value of money
PV = Present value of money
i = Interest rate per period (also called the discount rate)
n = Number of compounding periods of interest per year
t = Number of years or amount of time the money is held

Annuities
An annuity is a constant cash flow that occurs at regular
An annuity can occur at the end of each period or at the
Growing Annuities
A growing annuity is a cash flow that grows at a constant rate f
the growth rate in each period has to be the same as the growth

Perpetuities
A perpetuity is a constant cash flow at regular intervals forever

Growing Perpetuities
A growing perpetuity is a cash flow that is expected to grow at
me cannot be compared and aggregated.
he same point in time before comparisons and aggregations can be made.
h flows converts them into cash flows in present value terms.
ding converts present cash flows into future cash flows.

en Cash flows

ime value of money consists of the following variables:

d the discount rate)

of interest per year
me the money is held

that occurs at regular intervals for a fixed period of time.

of each period or at the beginning of each period.
grows at a constant rate for a specified period of time. Note that to qualify as a
be the same as the growth rate in the prior period.

t regular intervals forever.

at is expected to grow at a constant rate forever

gregations can be made.
alue terms.

iod of time.
me. Note that to qualify as a growing annuity,
Future Value of a lumpusm

You invest $1,000 in an account today that pays 6% inte

How much will you have in the account at the end of 10

PV 1000
Rate 6%
N 10

Futue value of a single lumsum

Using FV function in excel
Using compound factor (given in table)
Using calculator
The same amount if calcualted with simple int rate of 6%

PV 1000
Rate 6%Simple int
N 10
Amount 600

Application - Solve it
Happy Harry has just bought a scratch lottery ticket and
future study of his newly born daughter and invests this
years offering a promising yearly return of 6%. What is t
birthday of his daughter?
Frequency of Compounding

You deposit $1,000 in account at the beginning of the p

How much you will have at the end 1 year

Given
PV 1000
Rate 12%
Period 1Year
Frequency Quarterly
Updated rate, period
rate 0.03
Period 4

FV using FV function

Using Compounding factor

FV
Using Calculator

Suppose you have a choice of borrowing $1 million with

10% APR, quarterly interest 10.5% APR, semi-annual in
Under which loan terms would you have the largest paym

Stated Int ratFrequency ofEffective int

10% 4 10.38%
10.50% 2 10.78%
11% 1 11.00%

Given

PV 1,000,000
Rate 10%
Period 4
Frequency 4
FV ###

Contionus Compounding Int rate

Example

calculate the future value of 1,000 at the end of 40 year

PV 1000
Rate 10%
N 40Years

FV 54598.15 =C128*EXP(C129*C130)
ay that pays 6% interest, compounded annually.
unt at the end of 10 years if you make no withdrawals?

6%Compounded annually

Term
0
1
 2
3
4
5
6
7
8
9
10

₹1,790.85
1.7908 1790.848
1790.8477
simple int rate of 6%

h lottery ticket and won €10,000. He wants to finance the

hter and invests this money in a fund with a maturity of 18
urn of 6%. What is the amount available on the 18th
 beginning of the period, and interest is 12% per year, compounded q

1 year

₹1,125.51

1.1255
###
1126

wing $1 million with the following terms, with interest paid at the end o
APR, semi-annual interest 11% APR, annual interest
ave the largest payment at the end of four years?

10.381%
10.776%
11.000%

PV ### PV
Rate ### Rate
Period 4 Period
Frequency 2 Frequency
FV ### FV
t the end of 40 years if the given int rate : 10% continous compoundin

P(C129*C130)
hdrawals?

1000
1060
 1123.6
1191.016
1262.47696
1338.2255776
1418.519112256
1503.6302589914
1593.8480745308
1689.4789590027
1790.8476965429

=FV(C18,C19,,-C17,0)
=H37*C17 Multiply the compound facto
=C17*(1+C18)^C19
 o finance the
maturity of 18
he 18th
per year, compounded quarterly.

interest paid at the end of the loan:

nterest

1,000,000
11%
4
1
₹1,518,070.41
% continous compounding
mpound factor * lump sum
The Mechanics of Time value of money ?
Cash flows at different points in time cannot be compar
All cash flows have to be brought to the same point in time be
The process of discounting future cash flows converts them in
Conversely, the process of compounding converts present cash

Types of Cashflows
Simple Cashflows
annuities
growing annuities
perpetutities
growing perpetuties

The general formula to calculate the time value of money cons

FV = Future value of money
PV = Present value of money
i = Interest rate per period (also called the discount rate)
n = Number of compounding periods of interest per year
t = Number of years or amount of time the money is held

1/ Calculating Future Value of a lumpsum OR a single cash flo

FV = PV * [ 1 + (i / n) ] ^ (n * t)
Example : Currently you have $5,000 , you would like to know
Present value
t
n
interest rate
Future value
Future value using FV function

2/ Future value of a series of cash flows ?

Rate of interest

Year CFs
1 1000
2 2800
3 3200
4 4500
5 5800

The syntax of the FV function is:

FV( rate, nper, [pmt], [pv], [type] )
where,
rate is the interest rate per period (as a decimal or a percent
nper is the number of periods over which the investment is m
[pmt] is the regular payment per period (if omitted, this is se
[pv] is the present value of the investment (if omitted, this is
[type] specifies whether the payment is made at the sta
This can have the value 0 or 1, meaning:
0 - the payment is made at the end of the period (as fo
1 - the payment is made at the start of the period (as f

3/ How To Calculate Future Value When Interest is C

If the interest on your investment is compounded monthl
the annual interest rate needs to be converted into a mo
monthly interest rate =
number of months =

Example
Present value
Annual Interest rate
No of years
Future Value

Stated Int rate

Effective int rate
Future Value
Using FV function
but for excel built in function , no need
Rate is divided by frequency, tenor is multiplied by frequency

Example
Present value
Annual Interest rate
No of years
Future Value

4/ Future Value a single cash flow with a Variable Interest Rat

If you want to calculate the future value of a single investmen

the built-in Excel FVSCHEDULE function can be used for this.
The syntax of the FVSCHEDULE function is:
FVSCHEDULE( principal, schedule )
where,
principal is the present value of the investment;
schedule is an array of values that provides the sched
If provided as a range of cells, these may contain nume
Example
Present Value
Schedule of interest (Variable Int rates)
6.00%
5.00%
4.50%
7.50%
8.00%
Answer:
Future Value using FVSCHEDULE function in Excel

Future Value of a Series of Cash Flows (An Annuity

Annuity Cash flows:

An annuity is a series of equal cash flows, or paymen
The payments must be equal, and the interval between p

Annuity Due : An annuity due is an annuity with paymen

Ordinary Annuity : In contrast, an ordinary annuity generates
As a result, the method for calculating the present and future

Annuity Example
You save every month Rs 10,000 at the beginging of each mo
How much money you will have at the end of the 10 years if t

Given
PMT
Rate
Period
Future Value

For using FV function in excel, multiply the period by 12 and d

Rate
Period
Future Value

You save every month Rs 10,000 at the END of each month fo

How much money you will have at the end of the 10 years if t

Given
PMT
Rate
Period
Future Value

For using FV function in excel, multiply the period by 12 and d

Rate
Period
Future Value

Description Argument
Periodic interest rate rate
No. of periods nper
Periodic payment pmt

Future value

Compounded Periods per y

Weekly 52
Monthly 12
Quarterly 4
Semiannually 2
Annually 1

Description Value
Annual interest rate 7%
No. of years 5
Periodic payment -$100
Initial investment -$3,000
When payments are due 1
Compounding periods per yea 12

Future value $11,453.93

Future Value when Interest rate is on a Contionus co

Prsent value 1000
Interest Rate 5%
Period 3
Future Value 1161.834243

Prsent value 1000

Interest Rate 5%
Period 9
Future Value 1038.211997
me cannot be compared and aggregated.
he same point in time before comparisons and aggregations can be made.
h flows converts them into cash flows in present value terms.
ding converts present cash flows into future cash flows.

ime value of money consists of the following variables:

d the discount rate)

of interest per year
me the money is held

psum OR a single cash flow

, you would like to know what is the value after 5 years at the rate of 10% p
5000
5Years
1
10%
8052.550

10% pa

FV of CFs FV Function
1464.1 ₹1,464.10
3726.8 ₹3,726.80
3872 ₹3,872.00
4950 ₹4,950.00
5800 ₹5,800.00
19812.90 19812.90

as a decimal or a percentage);
which the investment is made;
 riod (if omitted, this is set to the default value 0);
stment (if omitted, this is set to the default value 0);
ment is made at the start or the end of the period.
meaning:
end of the period (as for an ordinary annuity);
start of the period (as for an annuity due).

ue When Interest is Compounded Monthly

s compounded monthly (while being quoted as an annual interest rate
be converted into a monthly interest rate and the number of years need
annual interest rate / 12
number of years * 12

50,000
8%
10
?

8%
8.16%
109,556.16
 ₹109,556.16

multiplied by frequency

50,000
8%
10
₹110,982.01

th a Variable Interest Rate

lue of a single investment whose interest rate varies over the lifetime of the
on can be used for this.
function is:

the investment;
hat provides the schedule of interest rates to be applied to the principa
ese may contain numeric values or be empty (empty cells denote a ze
 10,000

ction in Excel

h Flows (An Annuity

ash flows, or payments, made at regular intervals (e.g., monthly or

d the interval between payments must be regular

n annuity with payment due or made at the beginning of the payment i

dinary annuity generates payments at the end of the period.
g the present and future values differ.

he beginging of each month for the next 10 years.

e end of the 10 years if the rate of interest is 8% per annum
 10,000Beginning of each month
8% annual
10Years
?

ly the period by 12 and divide the interest by 12

0.6667%
120
₹1,841,656.75 =-FV(D137,D138,D131,0,1)

he END of each month for the next 10 years.

e end of the 10 years if the rate of interest is 8% per annum

10,000End of each month

8% annual
10Years
?

ly the period by 12 and divide the interest by 12

0.6667%
120
₹1,829,460.35 =-FV(D152,D153,D146,0,0)

Value
 6%
10
-$1,000

$13,180.79

Future value
$1,283.87 Annual interest rate
$1,283.36 No. of years
$1,282.04 Investment
$1,280.08
$1,276.28

Note - ve sign
Note - ve sign

is on a Contionus compounding basis

Cont. Comp.
Years
=C183*EXP(C184*C185)

Cont. Comp.
months time =9/12
=C189*EXP(C190*9/12) time d/365 for days
gregations can be made.
alue terms.
years at the rate of 10% per annum?
FUTURE VALUE PV *(1+R)^N

8052.55
₹8,052.55
s an annual interest rate),
he number of years needs to be converted into months.

Compounded HALF YEARLY

Compounded HALF YEARLY

0.0816000000000001
For formula, need to convert in to effective rate
 =FV(E71/2,E72*2,,-E70,0)

Compounded MONTHLY

ies over the lifetime of the investment,

be applied to the principal.

(empty cells denote a zero interest rate).
 13503.41685
13503.42=FVSCHEDULE(D106,B108

tervals (e.g., monthly or annually).

ginning of the payment interval.

he period.

per annum
 month

D131,0,1) ₹1,841,656.75

per annum

Converting Continuous Compounding into Nominal Int rate (Stated In

D146,0,0)
 5%
5
-$1,000
DULE(D106,B108:B112)
nt rate (Stated Interest rate) ?
Calculate the Future value of Series of Uneven Cash flo
Int rate 6%pa

Term cFS
1 1000
2 2000
3 3000
4 4000
5 5000

Given
Method 1 using Compounding factor
Term cFS FV factor
1 1000 1.2625 1262
2 2000 1.191 2382
3 3000 1.1236 3370.8
4 4000 1.06 4240
5 5000 1 5000
16255

Note : There is no readmy made formula in excel for cal

But you can calculate the NPV (net presesnt value) and t
6%
Term cFS
1 1000
2 2000
3 3000
4 4000
5 5000

NPV ₹12,146.91
₹16,255.3090
Uneven Cash flows

=(1+$D$4)^($B$21-B17)

a in excel for calculating FV of uneven cash flows

esnt value) and then calculating FV of the NPV amount
Suppose that you wish to have $20,000 saved by
And suppose you deposit funds today in an acco
How much must you deposit today to meet your

Given

FV 20,000
RATe 3%
Period 6

Present value
Present value
Present value

Suppose that you wish to have $1 million forty y

If you deposit funds today in an account that pa
what amount must you deposit today to reach y

FV 1,000,000
RATe 5%
Period 40

Present value
Present value
Present value

Frequency of Compounding
Consider an example: calculate the present value
five years if the annual interest rate is 6 percent,

Given
FV 10,000
Rate 6%
N 5
Adjusted Rate
Adjusted Term

Present value
Present value
Present value

How much would you have to deposit today in a

annual interest, compounded continuously, if yo
$100,000 at the end of 10 years?
 FV 10,000
Rate 4%
Term 10
PV 6703.2005

Solve the below:

(i) Which of the following requires the least amoun
a sum deposited in an account that pays 8 perce
quarterly.
(ii) A balance of $10,000, five years from today tha
a sum deposited in an account that pays 7 perce
annually.
(iii) A balance of $10,000, 10 years from today that
a sum deposited in an account that pays 4 perce
continuously.
(iv) A balance of $10,000, eight years from today th
from a sum deposited in an account that pays 4
compounded semiannually.
(i) FV 10,000
Term 5
Rate 7%
PV 7129.8618

(i) FV 10,000
Term 10
Rate 4%
PV 6703.2005
e $20,000 saved by the end of six years.
ds today in an account that pays 3% interest, com- pounded annually.
today to meet your goal?

pa
Years

16749.68513367 =E31/(1+E32)^E33 Using calculator

₹16,749.69 =-PV(E32,E33,,E31,0) USING PV FUNCT
0.837484256684 16749.68513 Using PV factor (

e $1 million forty years from now.

an account that pays 5% interest, compounded an- nually,
sit today to reach your goal?

pa
Years

142045.6823003 =E44/(1+E45)^E46 Using calculator

 ₹142,045.68 =-PV(E45,E46,,E44,0) USING PV FUNCT
0.1420456823 142045.6823 Using PV factor (

Not annual
te the present value of $10,000 due at the end of
st rate is 6 percent, compounded semiannually.

Semi annual 2
Years
0.03
10

7440.939148967 =E58/(1+F61)^F62 Using calculator

₹7,440.94 =-PV(F61,F62,,E58,0) USING PV FUNCT
0.744093914897 7440.939149 Using PV factor (

o deposit today in an account that pays 4%

d continuously, if you wish to have a balance of
 cc

es the least amount of a deposit today?

nt that pays 8 percent interest, compounded

years from today that has grown from

nt that pays 7 percent interest, compounded

ears from today that has grown from

nt that pays 4 percent interest, compounded

years from today that has grown

ccount that pays 4 percent interest,

(ii)
FV 10,000
Term 5 10
Rate 7%Semi annually 0.035
PV 7089.1881

(ii)
FV 10,000
Term 8
Rate 4%Semi annually
PV 7284.4581
unded annually.

sing calculator
SING PV FUNCTION
sing PV factor (table value). PV (6%,3)

sing calculator
SING PV FUNCTION
sing PV factor (table value). PV (6%,3)

sing calculator
SING PV FUNCTION
sing PV factor (table value). PV (3%,10)
Present value remains one of the simplest and most p
Cash flow can be moved back to present value terms b
The discount rate at which the discounting and comp
(1) the preference for current consumption,
(2) expected inflation and
(3) the uncertainty associated with the cash flows bei
implest and most powerful techniques in finance, providing a wide range of ap
resent value terms by discounting and moved forward by compounding.
counting and compounding are done reflects three factors:
sumption,

h the cash flows being discounted.

g a wide range of applications in both personal and business decisions.
compounding.

FUTURE VALUE 50,000

RATE 8%
N 10YEARS
PV 23159.6744
PV ₹23,159.67

PRESENT DEPOIST -10,000

PMT -1000MONTHLY
N 5YEARS
RATE 8%

FV OF INVESTMENT ₹88,375.31
ness decisions.
Time Value on Excel (Using the Financial Function (fx) Wizard)
Present Value: =PV()

How much would I need to deposit today in an account earning 10%

FV :
I:
n:
PV?
What if my interest was compounded monthly?

FV :
I:
n:
PV?
*** Note: Change values in 'FV' 'I' and 'n' to solve for PV ***

Present Value of an Annuity: =PV()

How much could I afford to borrow for a home if

I can make monthly payments of $12,000 per year for 30 years at 8%
What about monthly payment of $1,000?

PMT :
I:
n:
PVA?
What if I wanted to know what my montlhy payments would be a $2

PMT :
I:
n:
 PVA?
*** Note: Change values in 'PMT' 'I' and 'n' to solve for PVA ***

Present Value of an Annuity Due: =PV()

How much could I afford to borrow for a home if I can make annual p

PMT :
I:
n:
PVA?
PVAD?

What if I wanted to know what my montlhy payments would be a $20

PMT :
I:
n:
PVA?
PVAD?
*** Note: Change values in 'PMT' 'I' and 'n' to solve for PVA ***

Time Value on Excel (Using the Financial Function (fx) Wizard)

Unequal Cash Flows:

a)How
Present
muchValue
must I deposit today to receive $100 in year 1,$ 200 in y
earn 10% on my deposits?

Year
1
2
3
 4

Present Value of Unequal Cash Flows

Using NPV

b) Future Value

What will my bank account be worth if I deposit $100 in year 1, $20

earn 10% on my deposits?

Year
1
2
3
4

Future Value of Unequal Cash Flows

***Note: Change values of any variable to view changes***

Consider the series of cashflows Assume

PERIOD
6 MONTHS
12 MONTHS
18 MONTHS
24 MONTHS
RATE OF INT
 HALF YEAR RATE
CALCUATE THE PRESENT AND FUT

PERIOD
16 MONTHS
212 MONTHS
318 MONTHS
424 MONTHS

Description Value
Annual interest rate 7%
No. of years 5
Future value $50,000
Annuity type 0

Present value $35,242.70

Note : This calculate the PV of a lumpsum investment

Note : Whenever interest is not annual, interest rates are divi
ancial Function (fx) Wizard)

oday in an account earning 10% per year in order to accumulate $10,000 after 5 years?

$ (10,000.00)
10.00%
5
$ 6,209.21
d monthly?

$ (10,000.00)
0.83%
60
$ 6,077.89 ₹6,077.89
nd 'n' to solve for PV ***

or a home if
2,000 per year for 30 years at 8%?

$ (12,000.00)
8.00%
30
$ 135,093.40
montlhy payments would be a $20,000 car loan over five years at 8%?

$ (20,000.00)
0.67%
60
 $ 405.53
and 'n' to solve for PVA ***

or a home if I can make annual payments of $12,000 per year for 30 years at 8%? Wha

$ (12,000.00)
8.00%
30
$ 135,093.40
₹145,900.87

ontlhy payments would be a $20,000 car loan over five years at 8%?

$ (20,000.00)
0.67%
60
$ 405.53
$ 402.84
and 'n' to solve for PVA ***

ancial Function (fx) Wizard)

receive $100 in year 1,$ 200 in year 2, $300 in year 3, and $400 in year four if I can

PVIF at
FV 10% PV of CFn
$ 100 0.90909 $ 90.91
$ 200 0.82645 $ 165.29
$ 300 0.75131 $ 225.39
 $ 400 0.68301 $ 273.21

of Unequal Cash Flows $ 754.80

$ 754.80

h if I deposit $100 in year 1, $200 in year 2, $300 in year 3 and $400 in year 4 if I can

FVIF at
FV 10% FV of CFn
$ 100 1.10000 $ 133.10
$ 200 1.21000 $ 242.00
$ 300 1.33100 $ 330.00
$ 400 1.46410 $ 400.00

of Unequal Cash Flows $ 1,105.10

ble to view changes***

series of cashflows Assume that the annual rate of interest is given to be 10%

CASH FLOW
1000
2000
3000
4000
10% PA
 5%
THE PRESENT AND FUTURES VALUE OF CFS

CASH FLOW PV FV
1000 952.3809524 1157.63
2000 1814.058957 2205.00
3000 2591.512796 3150.00
4000 3290.809899 4000.00
8648.763 10512.625

Using NPV 8648.763

Interest CompouPeriods per yePresent value

Weekly 52 $35,242.70
Monthly 12 $35,270.25
Quarterly 4 $35,341.23
Semiannually 2 $35,445.94
Annually 1 $35,649.31

umpsum investment
nnual, interest rates are divided by the frequency of compounding, tenor is
accumulate $10,000 after 5 years?

PMT : $ (1,000.00)
I: 0.67%
n: 360
PVA? $ 136,283.49
five years at 8%?
0 per year for 30 years at 8%? What about monthly payment of $1,000?

PMT : $ (1,000.00)
I: 0.67%
n: 360
PVA? $ 136,283.49
PVAD? $ 137,192.05

ive years at 8%?

3, and $400 in year four if I can

year 3 and $400 in year 4 if I can

133.10
242.00
330.00
400.00
1,105.10

te of interest is given to be 10%.

 OF CFS

nt value

ency of compounding, tenor is multplied by the frequency

Present value of Series of Uneven Cash flows

Method 1 using pv factor (table values)

Given Discount rate
Term CFS PV factor PV factor * amount

1 1000 0.952381 952.380952381

2 2000 0.9070295 1814.05895692
3 3000 0.8638376 2591.51279559
5357.95270489
Method 2 Using PV function in excel

Term CFS

1 1000 ₹952.38
2 2000 ₹1,814.06
3 3000 ₹2,591.51
₹5,357.95
sh flows

5%
amount
Method 3 Using NPV function in excel

Term CFS

1 1000
2 2000
3 3000
NPV ₹5,357.95