What Is Your Understanding of the Following Concepts; Present Value, Present Value of an Annuity, Future Value, and Future Value of an Annuity. (Please Describe Any Formulas Related to Each.)

Present Value is the current worth of a in store(predicate) sum of money or stream of notes flows give a specified rate of call back. approaching cash flows are fireed at the deductive reasoning rate, and the higher the discount rate, the lower the present pass judgment of the next cash flows. Determining the appropriate discount rate is the key to properly valuing in store(predicate) cash flows, whether they be earnings or obligations.Present Value of annuity is a series of equal payments or receipts that total at evenly spaced intervals. Leases and rental payments are examples. The payments or receipts occur at the end of each period for an ordinary annuity small-arm they occur at the beginning of each period For an annuity due. PVoa = PMT (1 (1 / (1 + i)n)) / i prox Value is the take to be of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today.There are two slipway to calculate FV For an asset with simple annual i nterest = Original enthronement x (1+ interest rate *number of years)) 2) For an asset with interest intensify annually = Original Investment x ((1+interest rate)number of years) Future value of annuity is the value of a group of payments at a specified date in the future. These payments are known as an annuity, or set of cash flows.The future value of an annuity measures how much you would fuck off in the future given a specified rate of return or discount rate. The future cash flows of the annuity grow at the discount rate and the higher the discount rate, the higher the future value of the annuity. The current value of a set of cash flows in the future, given a specified rate of return or discount rate. The future cash flows of the annuity are discounted at the discount rate, and the higher the discount rate, the lower the present value of the annuity.