StudyFinance: Time Value of Money

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Time Value of Money

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Self-Paced Overview

Present Value of an Annuity

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Using Tables to Solve Present Value of an Annuity Problems

To find the present value of an annuity, use TVM Table 4: Present Value Of Annuity Factors. Find the appropriate factor and multiply it times the amount of the annuity to find the present value of the annuity.

Adobe Acrobat (PDF) File TVM Table 4: Present Value Of Annuity Factors

An example illustrates the process.

Find the present value of a 4-year, $3,000 per year annuity at 6%.

Simple Calculator Calculator

The Answer: Show Me$3,000 x 3.465 = $10,395

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This overview was developed by Dr. Sharon Garrison.
No adaptation of its content is permitted without permission.