Function pv

Calculates the present value of an annuity investment based on constant-amount periodic payments and a constant interest rate.

Since

v0.0.15

Examples

What is the present value (e.g., the initial investment) of an investment that needs to total $15692.93 after 10 years of saving $100 every month? Assume the interest rate is 5% (annually) compounded monthly.

import { pv } from 'financial'

pv(0.05/12, 10*12, -100, 15692.93) // -100.00067131625819
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By convention, the negative sign represents cash flow out (i.e., money not available today). Thus, to end up with $15,692.93 in 10 years saving $100 a month at 5% annual interest, one's initial deposit should also be $100.

Notes

The present value is computed by solving the equation:

fv + pv * (1 + rate) ** nper + pmt * (1 + rate * when) / rate * ((1 + rate) ** nper - 1) = 0
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or, when rate = 0:

fv + pv + pmt * nper = 0
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for pv, which is then returned.

References

Wheeler, D. A., E. Rathke, and R. Weir (Eds.) (2009, May).