What is the present value of an investment that will pay $1,000 in 5 years, if the discount rate is 10% per annum?
Where: PV = present value FV = future value = $1,000 r = discount rate = 10% = 0.10 n = number of years = 5 Ushtrime Te Zgjidhura Investime
Using the ROI formula:
PV = $1,000 / (1 + 0.10)^5 = $1,000 / 1.61051 = $620.92 What is the present value of an investment