How Do You Calculate Present Value Investment?
Calculating the present value of an investment is an important skill, one that can help you make wise investment decisions both now and in the future. The present value calculation is used to represent the current value of a series of future payments, making it a valuable tool for those considering an annuity. The present value calculation is also important to lenders because it represents the true value of car payments buyers will make through the years. Log on to your computer and open a spreadsheet program. Microsoft Excel and other popular spreadsheet programs include a built-in function called “PV” for present value. This function is designed to calculate the present value of an investment based on a series of payments. Gather the information you need for the present value calculation. To calculate the present value of an investment you need to know the interest rate per period, the number of payment periods and the payment amount. Enter the interest rate per period. If the intere
