TVM03 - Present Value of a Single Sum

Audio Transcript

 What is the present value of $115,292 to be paid in six years discounted at 11.5% compounded annually?

First, plug in the known values into the appropriate cells:

The future value – FV – is $115,292

The interest rate – Rate – is 11.5%

The number of periods – NPER – is 6

The unknown – present value – PV is determined by

Going to the formulas tab, look for the PV function.

The function wizard pops up

Select FV,

Select Rate,

Select NPER

Hit OK

The present value is $60,000