Present Value (PV) Basics….Formulae

Present Value (PV) Basics….Formulae

Present Value, PV, Formulae, Time Value of Money, Tutorials, basics, Money, Investment fundamentals, Cash Flow

Terms uses :
PV = Present Value;
A = Annuity;
r = interest rate;
g = growth rate;
n = number of periods;
CF = Cash Flow;
 
“A bird in the hand is worth two in the bush” – Miguel de Cervantes
 
If someone owes you 10,000/- , it is advantageous to get the money today If you get this money today:
–> You could earn interest and invest it and you will receive this quantity plus some other amount in the future.
–> You can use it to pay your debts and therefore, lower the interest amount paid on your debt.
–> Or you can spend it and enjoy it as you wish.
 
More on Time Value of Money here

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