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Present Value

Present value of future cash flow – Discounting

Current value of some future cash flow PV = FV /(1 + 1/Y)N.



Q: If interest rate of 10%, What sum invested today will grow to $1,000 in 5 years?

PV = FV * (1/(1 + r)N)
= ($1,000)*(1/(1.1)5) = 621



We need to know the first three rows of TI BA-II Plus/Professional calculator for CFA Exam


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