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    Formula for Present Value and Sample Calculation

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    The concept of present value gives the equivalent in dollars available immediately to a payment that is made at some point in the future.

    What amount of money today is equivalent to $1,100 one year from now, if banks are paying an interest rate i = 10% per year? In other words, what is the present value of $1,100 received one year from now, when interest rates are 10%? Show all calculations.

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    https://brainmass.com/economics/banking/formula-for-present-value-and-sample-calculation-475859

    Solution Summary

    This solution gives the formula for the present value of a future payment, and gives a sample calculation showing all work.

    $2.19