TVM20- Present Value of a Single Sum

Audio Transcript

What amount should be deposited in a bank account today to grow to $15,000 three years from today? Use an interest rate of 8.5%.

Compute the present value of a future amount.

Enter the known variables.

The future value, FV, is $15,000.

The rate is 8.5%

The number of periods, NPER, is 3

We go to the Formulas tab and look for the PV function.

We click on PV,

We click on rate,

We click on NPER.

Click OK

The present value, PV, is -$11,744.