Present Value of a Lump Sum with more than 1 compounding period per yearSometimes, certain institutions pay out interest more than once each year. It is possible the interests are paid out
- Semi Annualy
Formula of Present Value of a Lump Sum with more than 1 compounding period per year
PV = FVn * (1+(r/m))^(-(m*n))
- FVn is the Future Value after a specific period
- PV is Present Value
- r is the interest rate
- n is the period. For example 5 years.
- m is the compounding period
Present Value of an Ordinary Annuity
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