Present Value of an Ordinary AnnuityAn Annuity is a series of equal cash flow over a period of time. The Present Value of an Ordinary Annuity is defined as the total value of the series of equal cash flow discounting compound interests.
Formula of Present Value of an Ordinary Annuity
PV = A * ((1-(1/((1+r)^n)))/r)
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.
- A is the Annuity amount
Present Value of a Perpetuity
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