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Accounting Study Guide |
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| U.S. GAAP | IFRS, IAS | Accounting Topics |
Present Value, Future
Value
Simple
and Compound Interest Methods |
| Present Value, Future Value |
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Future
Value = Present Value + Interest Amount Interest amount = Principal amount x Interest rate Future
Value of a Single Present AmountFuture value = Present amount x (1 + r)n r = interest rate n = number of periods Future
Value of an Ordinary AnnuityFuture value = Annuity Amount x [(1 + r)n - 1] / r r = interest rate n = number of periods Present
Value of a Single Future AmountPresent value = Future Amount x 1 / (1 + r)n r = interest rate n = number of periods Present
Value of an Ordinary AnnuityPresent value = Annuity Amount x [1 - 1/(1 + r)n] / r r = interest rate n = number of periods Ordinary
Annuity: Same amount is
paid at the end of each period.Annuity due: Same amount is paid at the beginning of each period. |
| Tables for PV and FV Factors |
| Table
of Future Value Factors for a Single Present Amount (pdf) Table
of Present Value Factors for a Single Future Amount (pdf) Table
of Future Value Factors for an Ordinary Annuity (pdf) Table
of Present Value Factors for an Ordinary Annuity (pdf)
How
to derive PV and FV factors (pdf)
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