LaTeX
PV=\frac{FV}{(1+r)^n}Variables
- PV: present value
- FV: future value
- r: rate per period
- n: periods
How to use this formula
Discounts a future amount back n compound periods.
Important notes
- The discount rate must match the period length.
- Risk and inflation assumptions determine the chosen rate.
Quick example
FV=1210 at 10% for two periods has PV=1000.
Applicability, worked calculation, and verification
Assumptions and domain checks
- The discount rate must match the period length.
- For the Present Value, every denominator must be nonzero, and the numerator and denominator must remain correctly grouped.
- Match the interest rate to the compounding period, convert percentages to decimals, and keep cash-flow timing consistent.
Worked example
FV=1210 at 10% for two periods has PV=1000.
Common mistakes
- When copying Present Value, keep the complete numerator and denominator grouped; a missing brace or parenthesis changes the result.
- Verify the result of Present Value with a known case, inverse operation, dimensional check, or independent calculation before publishing it.
Continue the workflow
Use Present Value in your own work
- Check the domainMatch the variables and assumptions to the problem before substituting values.
- Copy the exact notationPreserve grouping, signs, and exponents in
PV=\frac{FV}{(1+r)^n}. - Edit or convertOpen the expression in the LaTeX editor, then export it for your document or web page.
Review and verification
Last reviewed: 2026-07-23
Automated quality check: Kept noindex until the missing evidence is supplied.
Formula references
- Algebra and Trigonometry 2eOpenStax, Rice University — Reviewed algebra, functions, sequences, trigonometry, and analytic geometry definitions and examples.
Frequently asked questions
What is the Present Value used for?
Discounts a future amount back n compound periods.
Can I copy this formula as LaTeX?
Yes. Copy PV=\frac{FV}{(1+r)^n} or open it in the LaTeX editor.
What should I check before using it?
Confirm that each variable, unit, domain restriction, and assumption matches the problem.