Present Value Calculator
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The present value is $5,172.56.
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2. Interest Rate%: is the interest paid to the account at the end of each period. (Not annualized.)
3. Periods: is the number of periods. Interest is paid and payments are made at the end of each period.
4. Payment: is the amount to be withdrawn at the end of each period.
5. Present value calculations become unreliable when the interest rate drops below some trivial value
(of say .01%/year) and break down completely at zero interest rate. In this case use another method.
6. User input can be any constant statement using only numerics and +, -, *, and /. For example 6/12
could be entered to convert an annualized 6% rate into a monthly rate.
Example: You want to withdraw $100 per month from an account earning 6% (annualized) for 5 years.
How much must be deposited now (present value) to provide that cash flow?
Interest Rate% = 6/12 (Since Payments are being made monthly.)
Periods = 5*12 (12 monthly periods per year for 5 years); Payment = 100