Present value (P)
—
- P
- present value
- A
- uniform amount per period
- i
- discount rate per period
- n
- number of periods
Worked example · $5,000 per period for 7 periods at 5% is worth $28,932 today.
Eq.05 · Uniform series
Series Present Worth
Discounts every payment in a steady stream back to the present and sums them into a single value today.
P = A [(1 + i)^n - 1] / [i (1 + i)^n]