Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this ...

$5,801.91, is due to rounding in the first calculation. Present Value of an Annuity Due Similarly, the formula for calculating the PV of an annuity due considers that payments are made at the ...

Calculating the interest rate using the present value formula can, at first, seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's ...

Raiffa, Howard. "Methods of Calculating Net Present Value and Internal Rate of Return, Programmed Exercises." Harvard Business School Supplement 171-261, December 1970. (Revised May 1991.) ...

The internal rate of return (IRR) measures an investment's profitability, taking into account the time value of money. It's the discount rate that makes the net present value (NPV) of all cash ...