Calculate the present value of future cash and periodic payment based on specified parameters. Get accurate financial insights.

Present Value (PV) of a Future Cash and Periodic Payment

Purpose

The Present Value (PV) function calculates the current value of a future sum of money and periodic payments based on the interest rate and duration.

Use Cases

• Planning for future financial goals
• Evaluating investment opportunities
• Assessing loan options

How to Use

1. Enter the future value of the cash flow.
2. Specify the interest rate per year.
3. Input the duration in years.
4. Provide the periodic payment amount.
5. Select the payment interval (e.g., monthly).
6. Choose when the payment is made within the interval.

Input Values

1. Future Value: The total amount of money to be received in the future.
2. Interest Rate: The annual rate at which the money grows.
3. Default unit is percentage per year.
4. Duration: The number of years over which the cash flow occurs.
5. Periodic Payment: The regular amount of money paid or received.
6. Payment Interval: The frequency at which payments are made (e.g., monthly).
7. Payment When: Indicates when the payment is made within the interval.

Output Values

1. Present Value: The current value of the future cash flow and periodic payments.
2. Cash Flow: The cash flow generated by the investment.

Any other Instruction

• Ensure to input accurate and consistent values for precise results.
• Review the calculated Present Value and Cash Flow to make informed financial decisions.

Code Analysis

1. Calculate the interest rate per period based on the specified payment interval.
2. Determine the total number of payment periods.
3. Compute the present value using the future value, periodic payment, and other input values.

Technical Parameters

future_value, fv_part, interest_rate, duration, periodic_payment, pp_part, payment_interval, payment_when

Return Values

Present Value, Cash Flow

Example Expressions

You can use the following expressions to directly evaluate in a non-interactive manner using eva():

pv(future_value=150000, interest_rate='5 pct/yr', duration='10 yr', periodic_payment=2000, payment_interval='yr', payment_when='1')
pv(future_value=120000, interest_rate='8 pct/yr', duration='5 yr', periodic_payment=1500, payment_interval='mo', payment_when='2')

Click on Help icon to open the help page on a separate window.