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# What is the difference between future value and present value? What data do you need to...

What is the difference between future value and present value? What data do you need to do a future value or present value calculation?

Future value: Today Dollar value in future at a certain point of time.

Present value: Future dollar value of today’s dollar expected to be received in future at a certain point of time.

Future value = P×(1+r)^n

P is present value

r is interest rate per period

n is number of periods

P, r and n are required for calculating future value.

Present value = P×(1÷(1+r)^n)

P is Future value

r is interest rate per period

n is number of periods

P, r and n are required for calculating future value.

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