Present value of a series of unequal annual cash flows formula
Description of the Present value of a series of unequal annual cash flows formula
Formula for the calculation of the present value of a series of annual cash flows with unequal amounts
Formula
\[ PV= \sum_{n=1}^{N} \frac {F_{n}}{\left( 1+i \right )^n} \ \]
Symbols
\(F_{n}\ \)
Cash flow of year n
\(i\ \)
Annual interest rate
\(N\ \)
Number of periods (years)
\(n\ \)
Number of years between today and the payment of the cash flow