You purchase a home for $207,000 that you expect to appreciate 8% in value on an annual basis. How much will the home be worth in ten years?   Factors to use for n=10, I =8% (DO NOT USE ANY OTHER FACTORS OR EQUATIONS) Future Value of $1                                 2.15892 Future Value of an Annuity of $1            14.48656 Present Value of $1                               0.46319 Present Value of an Annuity of $1           6.71008

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.