Finite Math Examples

$f = 12430$ , $r = 0.05875$ , $t = 1.80821$

Step 1

Present value is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk.

$P V = \frac{f}{{(1 + r)}^{t}}$

Step 2

Substitute the values into the formula.

$P V = \frac{12430}{{(1 + 0.05875)}^{1.80821}}$

Step 3

Simplify the right side.

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Step 3.1

Simplify $\frac{12430}{{(1 + 0.05875)}^{1.80821}}$ .

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Step 3.1.1

Simplify the denominator.

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Step 3.1.1.1

Add $1$ and $0.05875$ .

$P V = \frac{12430}{{1.05875}^{1.80821}}$

Step 3.1.1.2

Raise $1.05875$ to the power of $1.80821$ .

$P V = \frac{12430}{1.1087451}$

Step 3.1.2

Divide $12430$ by $1.1087451$ .

$P V = 11210.87247964$