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    MaryLou182's Avatar
    MaryLou182 Posts: 5, Reputation: 1
    New Member
    		  
    #1

    Dec 23, 2009, 06:09 AM
    Investment appraisal
    Just wondering if someone could help me with working this question out, I have tried but I'm really stuck!

    Amount in future = £80,000.
    Number of years = 23.
    Rate of interest per year = 7%.

    Calculate the present value.

    If anyone could help, I'd be hugely grateful!
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
    Senior Member
    		  
    #2

    Dec 23, 2009, 09:32 AM
    The PV of a single future amount is found via the formula



    ... where P, F, r, and n are, respectively: The present value; the future amount; the interest rate per period (one year, in your case); and the number of periods (years) into the future at which F occurs.
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