PResent value formulas (1 Viewer)

[ally89]

I need to no the difference between the present value formulas before tomoz

 

[PC]

The big ugly one is when you need to know the present value and you're given the equivalent monthly payment.

The other one is when you need to know the present value and you've got the final (future) value.

 

[ally89]

thanks so much!

 

[jess1990!]

just some extra advice, when ur looking at any sort or annuity or interest question pay close attention to when the interest is compounded and how many periods there are.

Eg. if the questions says 12%p.a. compounded monthly over 3 years.

r = 0.12/12 (which gives monthly rate)
n = 3x12 (periods in months)
= 36