Introduction to Present Value

A detailed tutorial on solving for the present value. Step by step tutorial including several examples of solving for the present value for reference.

Present value is the value on a given date of a future payment or series of future payments. It is typically discounted to reflect the time value of money, and sometimes other factors. Because of this, the main calculation for present value is simply the calculation for the time value of money. The time value of money can be found by using the compund interest formula, which can be mathematically expressed as . This is equal to the present value.