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Time Value of Money - Concepts

Future Value Calculation Present Value- Annuity Calculation FV= PV*(1+r)^n

S.No Particular Value S.No Particular Value

PV= FV*1/(1+r)^n
1 Present Value 100 1 Future Value 1000000
2 Rate 4% 2 Rate 8%
3 Period 1 3 Period 17 Doubling = 0.35+ (69/r)
4 Future Value 103,50 4 Annuity 31000,03
FV= A*[(1+r)^n-1]/r
Present Value Calculation Future Value - Annuity Calculation
S.No Particular Value S.No Particular Value
PV= A*[(1-1/(1+r)^n]/r

1 Future Value 100 1 Future Value 100000

2 Rate 4% 2 Rate 4% Perpetuity = A/r
3 Period 1 3 Period 5
4 Present Value 96,62 4 Annuity 22148,14 Growing Perpetuity = A/(r-g)

Doubling of Amount Effective Interest Rate Effective Interest Rate =

S.No Particular Value S.No Particular Value [1+r/m]^m-1

1 Rate (% ) 15,00 1 Rate (% ) 8,00%

2 Time Period (Years) 4,95 2 Number of Times 2 FV (Componding) =
PV*[1+r/m]^(m*n)
3 Effective Rate (% ) 8,16%

Perpetuity Growing Perpetuity PV (Componding) =

S.No Particular Value S.No Particular Value FV*[1+r/m]^(m*n)

1 Rate (% ) 10,00 1 Rate (% ) 10,00

Annuity Due =
2 Total Amount 1000,00 2 Growth Rate (% ) 5,00 Annuity Ordinary*(1+r)
3 Perpetuity Amount 100 3 Total Amount 1000
4 Perpetuity Amount 200

Future Value With Timely Componding Shorter Discounting Period

S.No Particular Value S.No Particular Value

1 Present Value 100 1 Future Value 100

2 Rate 4% 2 Rate 4%
3 Number of Times 1 3 Number of Times (m) 2
4 Period (Years) 1 4 Period (Years) 2
5 Future Value 103,50 5 Present value 193,18

Abhinav Sengupta
 Present Value of growing Annuity Present Value - Inflation Calculation
S.No Particular Value S.No Particular Value
Inflation Net Value =
A*(1+r)^n/(1+g)^n
1 Number of Units 1 1 Number of Units 1
2 Future Annuity Per Unit 1000 2 Future Value 100
3 Growth Rate (% ) 11% 3 Growth Rate (% ) 6%
4 Rate (% ) 10% 4 Rate (%) 8% Present Value (Growing Annuity) =
5 Period (Years) 10 5 Period (Years) 1 A*(1+g)*[1-(1+g)^n/(1+r)^n]/[r-g]
6 Present Value 10513,89 6 Present Value 98,15

Future Value - Inflation Calculation

S.No Particular Value

1 Number of Units 1
2 Present Value 1000
3 Dearness Rate (% ) 6,00%
4 Bank Rate (% ) 7,50%
5 Period (Years) 1
6 Future Value 1014,15
7 Effective Rate (% ) 1,42%

Abhinav Sengupta