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Time Value of Money

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Present Value of an Annuity

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.

An example illustrates the process.

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


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

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