Finite Math Examples

$f = 780$ , $r = \frac{91}{4 %}$ , $t = 5$

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.

$P V = \frac{780}{{(1 + \frac{91}{4 %})}^{5}}$

Step 3

Simplify the right side.

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Step 3.1

Simplify $\frac{780}{{(1 + \frac{91}{4 %})}^{5}}$ .

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Step 3.1.1

Convert $4 %$ to a decimal.

$P V = \frac{780}{{(1 + \frac{91}{0.04})}^{5}}$

Step 3.1.2

Simplify the denominator.

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Step 3.1.2.1

Divide $91$ by $0.04$ .

$P V = \frac{780}{{(1 + 2275)}^{5}}$

Step 3.1.2.2

Add $1$ and $2275$ .

$P V = \frac{780}{2276^{5}}$

Step 3.1.2.3

Raise $2276$ to the power of $5$ .

$P V = \frac{780}{61074692437861400}$

Step 3.1.3

Cancel the common factor of $780$ and $61074692437861400$ .

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Step 3.1.3.1

Factor $20$ out of $780$ .

$P V = \frac{20 (39)}{61074692437861400}$

Step 3.1.3.2

Cancel the common factors.

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Step 3.1.3.2.1

Factor $20$ out of $61074692437861400$ .

$P V = \frac{20 \cdot 39}{20 \cdot 3053734621893070}$

Step 3.1.3.2.2

Cancel the common factor.

$P V = \frac{20 \cdot 39}{20 \cdot 3053734621893070}$

Step 3.1.3.2.3

Rewrite the expression.

$P V = \frac{39}{3053734621893070}$