The Present Value of Annuity Due formula is used to calculate the present value of a series of cash flows, or periodic payments, that are generated by an investment in the future. These payments are expected to be made on predetermined future dates and in predetermined amounts. Present Value of Annuity is based on Time […]

## Future Value of Annuity Formula

The future value of annuity formula is used to calculate the value of a series of periodic payments at a future date. This can be useful in determining how much you would have in future if you know how much you’re able to invest per period. It can also be helpful to compute the total […]

## Annuity Payment Formula

The annuity payment formula is used to calculate the regular payment on an annuity – a series of payments received at a future date. This is the exact same formula used in loan payments. Where P = the payment, PV = the present value, r = the rate per loan period, and n = the […]

## Weighted Average Formula

A weighted average is the average value of a set of numbers, with different levels of relevance. This relevance of each number is referred to as its weight, and is represented as a percentage of the total relevancy. All weights in a weighted average formula calculation should be equal to 100%, or 1. Where w […]

## Present Value Formula

Present Value (PV) formula refers to the exact numerical method to calculate present value of an asset or capital owned in future. The present value is often known as discounted value. Where PV = Present Value, CF is Cash Flow at period 1, r is the rate of interest or return, and n is the […]

## Perpetuity Formula

What Is Perpetuity? A Perpetuity is an endless consistent series of payments made at equal intervals of time. Said differently, a Perpetuity, or a perpetual annuity, is an infinite stream of cash flow payments. How to Calculate the Present Value of Perpetuity? There are two basic methods used to calculate the Present Value of Perpetuity. […]

## Present Value of Annuity Formula

What is Present Value of Annuity? The present value of annuity formula calculates the value of a series of payments at a given time. It relies on the concept of the time value of money (i.e one dollar today is worth more than one dollar at a future date). Where P is Periodic Payment, r […]

## Future Value Formula

What is Future Value? The value of an asset or investment at a specific time or date in future is called Future Value (FV). It is the amount to which an investment or a series of investments will grow by a specified date and time in future and will be received after T years or […]

## Average Collection Period Formula

What Is Average Collection Period? The Average Collection Period (ACP) is an average number of days between the day of a credit sale and the day the company receives the payment. In other words, it’s a number of days needed to convert receivables into cash. How to Calculate the Average Collection Period? The formula […]