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The Formula for Calculating Present Value of an Even Cash Flow

Two basic annuity formulas exist: annuities with a fixed payment period and perpetual annuities that continue forever. Present value describes the annuity in today's dollars. As an example ... read more

What Is Present Value & How Is It Calculated?

Present value is a useful mathematical formula designed to figure out if ... be it a dollar bill, a house, or an annuity, the better, as it is worth more now, with all of those investment options ... read more

Perpetuity: Financial Definition, Formula, and Examples

An annuity with no termination date is an ... The higher the growth rate of future payments per period, the greater the present value. The formula for a growing perpetuity is nearly identical ... read more

How to Calculate Future Cash Flow Discount

Although you can discount each payment individually, using an annuity formula is easier for regular payments. Present value discounts future cash flow to present-day dollars. The discount rate can ... read more

Are Annuities a Good Investment? Pros and Cons to Consider

Using the present value of an annuity formula helps you compare annuities with other financial options clearly. This way, you can see what’s special about annuities — both the good and the bad ... read more

Top 15 Financial functions in Microsoft Excel

The PMT function is an Excel Financial function that returns the periodic payment for an annuity. The formula for the PMT ... The NPV function returns the net present value of an investment ... read more

17 Things You Need to Know About Annuities

The present value shows how much the future benefits you'll receive from the annuity would be worth in today's dollars. You can use the following formula to calculate an annuity's present value ... read more

What Happens to an Annuity When You Die?

An annuity is an investment product typically purchased from an insurance company to provide additional financial security in retirement. Annuities generally consist of two phases: the ... read more

Perpetual Bond: Definition, Example, Formula To Calculate Value

As such, perpetual bonds, even though they have no maturity date and pay interest forever, can be assigned a finite value, which in turn represents their price. Present value = D / r Where ... read more

How Higher Interest Rates Change Tax And Estate Planning Strategies

Higher interest rates make some strategies more advantageous than a few years ago, while others have lower benefits. read more

What Is the Time Value of Money & Why Does It Matter?

This concept isn't new; it dates back to ancient times. So, how do we measure the time value of money? The formula takes the present value of money, then multiplies it by compound interest for ... read more