Master the Time Value of Money formula. Present value, future value, annuity, and perpetuity calculations explained with examples. Essential for CFA Level 1.
The current worth of a future cash flow discounted at the appropriate rate. Foundation of all valuation.
The value of a current amount after earning interest over a specified period.
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Future Value
Where: r = interest rate per period, n = number of periods
Present Value
Where: r = discount rate, n = periods
The complete set of formulas for this module lives in the study dashboard, alongside flashcards, quizzes, mind maps and progress tracking.
Future Value
Single lump sum compounding
Present Value
Discounting future cash flows
The complete set of formulas for Quantitative Methods lives in the study dashboard, alongside flashcards, quizzes, mind maps and progress tracking.
Use when:
Avoid when:
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What is the present value of $10,000 to be received in 5 years at a discount rate of 8%?
Full cheat sheet, flashcards, mind map, and quiz for Time Value of Money in Finance.
All 80+ CFA Level 1 formulas in one searchable reference page.
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