# Present Value Tables

The purpose of the present value tables is to make it possible to carry out present value calculations without the use of a financial calculator.

They provide the value now of 1 received at the end of period n at a discount rate of i%.

The present value formula is:

`PV = FV / (1 + i)n`

This can be re written as:

`PV = FV x 1 / (1 + i)n`

PV tables are used to provide a solution for the part of the present value formula shown in red, this is sometimes referred to as the present value factor.

`PV = FV x Present value factor`

## PV Tables Example

What is the present value of 4,000 received in 14 years time if the discount rate is 8%?

```FV = 4,000
n = 14
i = 8%

PV = FV /(1 + i)n
PV = 4,000 /(1 + 8%)14
PV = 4,000 x 1 / (1 + 8%)14
PV = 4,000 x Present value factor for n = 14, i = 8%
PV = 4,000 x 0.3405
PV = 1,362
```

The present value factor of 0.3405, is found using the tables by looking along the row for n = 14, until reaching the column for i = 8%, as shown in the preview below. 