Present Value
Posted by Professor Cram in Time Value of Money
Present Value
This Flash tutorial walks you through the steps to calculate present value from the future value, interest rate, and number of maturity periods. You can enter your own values, too.
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Could you explain to me how you can multiply $50,000 by 0.527 and get $36,373.56 as an answer? It certainly doesn’t work out that way for me. This is from the explanation of finding present value.
Carol, the values shown are rounded at each step but the final answer uses the unrounded values. Sure, if you multiply just those two numbers you get a slightly different answer, but the answer given is in fact the correct one based on the original formula.
I hope that makes sense