Present value calculations:
Future Value:
FVn C0 (1 r )n
Present Value of Single cash flow and Discount Factor:
1
DFn
(1 r )n
Cn
PV0 DFn C n
(1 r )n
Constant Perpetuity:
C1
PV0 =
r
Perpetuity with constant growth rate:
C1
PV0 =
rg
Constant Annuity:
C1 1
PV0 1
r (1 r ) N
Annuity with constant growth rate:
C1 1 g N
PV0 1
rg 1 r
Notations: Ct – cash flow at time t, r – discount rate, N – number of periods, g – growth rate