Olevikväärtuseks

Olevikväärtuseks, also known as present value, is a financial concept that represents the current value of a future sum of money. It is calculated by discounting the future value to the present, using a discount rate that reflects the time value of money. The present value is a crucial tool in finance and economics, used to compare the value of different investments, loans, or cash flows that occur at different times.

The formula for calculating the present value of a single future payment is:

PV = FV / (1 + r)^n

where PV is the present value, FV is the future value, r is the discount rate, and n is the number of periods until the future value is received.

For a series of future payments, such as an annuity, the present value can be calculated using the formula:

PV = PMT * [(1 - (1 + r)^-n) / r]

where PMT is the periodic payment.

The present value is used in various financial decisions, such as determining the value of an investment, evaluating the cost of a project, or comparing the value of different financial instruments. It is also used in the calculation of net present value (NPV), which is a measure of the profitability of an investment or project, taking into account the time value of money.