Present value and discounting

Set a future amount, the discount rate and the years away to see what it is worth today.

Learn present value properly

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Questions students ask

What is net present value?

The total present value of all future cash flows minus the cost of the investment. A positive NPV means the project is worth it at that rate.

What formula does it use?

PV = FV ÷ (1 + r)ᵗ.

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