Discounting Future Value

Discounting the future value is the process of figuring out what that future value is in present-day money. Use this tutorial to learn how to calculate the discounted future value given the future value, periodic interest rate, and number of periods.

Future value is a result of the compounding of interest earned on the present value, or starting amount. As time progresses, the periodic interest is added to the starting amount and the next periodic interest amount is calculated based on that.

As such, the amount of interest earned over the entire time period can be found by subtracting the present value from the future value:

Amount of Interest = FV – PV

Get More Help!

Click one of these links to get more help from another Cramlet in this same chapter:

• Discounting Future Value
• Calculating Future Value
• Annuities – Present Value and Future Value
• Compound Interest Made Simple
• Rule of 78
• Simple Interest: Bottomless Worksheet
• Present Value: Bottomless Worksheet
• Compound Interest: Bottomless Worksheet
• Simple Interest
• Present Value
• Compound Interest