present value of a future amount
 

How do I find out the current value of a future amount? Let's assume 10
years from now somebody hands me $10,000. Assuming 4% inflation, how do I
determine how much that $10k is worth today? When I look at PV and NPV they
seem to want periodic payments which this doesn't have.

thanks

present value of a future amount
 

=PV(0.04/12,120,0,10000,1)
--
If this posting was helpful, please click on the Yes button.
Regards,

Michael Arch.




"xrbbaker" wrote:

How do I find out the current value of a future amount? Let's assume 10
years from now somebody hands me $10,000. Assuming 4% inflation, how do I
determine how much that $10k is worth today? When I look at PV and NPV they
seem to want periodic payments which this doesn't have.

thanks

present value of a future amount
 

Cool. The amount seems intuitively right. Why does it return a negative
number?

Thanks much!

Russ

"Michael" wrote:

=PV(0.04/12,120,0,10000,1)
--
If this posting was helpful, please click on the Yes button.
Regards,

Michael Arch.




"xrbbaker" wrote:

How do I find out the current value of a future amount? Let's assume 10
years from now somebody hands me $10,000. Assuming 4% inflation, how do I
determine how much that $10k is worth today? When I look at PV and NPV they
seem to want periodic payments which this doesn't have.

thanks

present value of a future amount
 

It's the convention that most financial functions (including Excel) use. By
convention, a negative number is money out of your pocket, and a positive number
is money going back into your pocket. However, you can use them whichever way
you want as long as you remember they have opposite signs. If you have payments,
make sure the sign is correct.

--
Regards,
Fred


"xrbbaker" wrote in message
...
Cool. The amount seems intuitively right. Why does it return a negative
number?

Thanks much!

Russ

"Michael" wrote:

=PV(0.04/12,120,0,10000,1)
--
If this posting was helpful, please click on the Yes button.
Regards,

Michael Arch.




"xrbbaker" wrote:

How do I find out the current value of a future amount? Let's assume 10
years from now somebody hands me $10,000. Assuming 4% inflation, how do I
determine how much that $10k is worth today? When I look at PV and NPV
they
seem to want periodic payments which this doesn't have.

thanks

present value of a future amount
 

Makes sense. Thanks!

"Fred Smith" wrote:

It's the convention that most financial functions (including Excel) use. By
convention, a negative number is money out of your pocket, and a positive number
is money going back into your pocket. However, you can use them whichever way
you want as long as you remember they have opposite signs. If you have payments,
make sure the sign is correct.

--
Regards,
Fred


"xrbbaker" wrote in message
...
Cool. The amount seems intuitively right. Why does it return a negative
number?

Thanks much!

Russ

"Michael" wrote:

=PV(0.04/12,120,0,10000,1)
--
If this posting was helpful, please click on the Yes button.
Regards,

Michael Arch.




"xrbbaker" wrote:

How do I find out the current value of a future amount? Let's assume 10
years from now somebody hands me $10,000. Assuming 4% inflation, how do I
determine how much that $10k is worth today? When I look at PV and NPV
they
seem to want periodic payments which this doesn't have.

thanks