The process of calculating future values = compounding, ie the sum of beginning amount and the interest earned.

The process of finding out the present value = discounting ie the inverse of compounding.

**Basically for a single cash flow: **

F = P [F/P, i%, N]

F = P (1+i)^{N}

!!! The following are the cases for discrete compounding and discrete cash flow.

**Case 1. Finding F when A is given**

F = A [F/A, i%, N]

The quantity inside the square brackets = Uniform series compound factor

**Case 2. Finding P when A is given**

P = A [P/A, i%, N]

The quantity inside the square brackets = Uniform series present worth factor

**Case 3. Finding A when given F**

A = F [A/F, i%, N]

The quantity inside the square brackets = Sinking fund factor

**Case 4. Finding A when given P**

A = P [A/P, i%, N]

The quantity inside the square brackets = Capital recovery factor

## Leave A Comment