# Solver Corporate Finance: Calculate Present Value of a fixed cash flow, given Interest Rate and Time period

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### Source code of 'Corporate Finance: Calculate Present Value of a fixed cash flow, given Interest Rate and Time period'

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 ==section input Find Present Value (PV) of a fixed cash flow, given Cash flow amount per year (Payments at end of year; positive for inflow, negative for outflow) = \$ *[input p=1000], Interest Rate (applicable) = *[input r=5]% and Time = *[input t=2] years. ==section solution perl print "To find the present value (PV) of a cash flow, we need to discount the yearly payments (or receipts) by the interest rate applicable to the risk associated with the cash flow.
The formula for calculating the PV is
{{{PV = sum( Ci/(1+r)^i, i=1, T )}}}

For a constant cash flow, this becomes
{{{PV = C/(1+r)*sum( 1/(1+r)^(i-1), i=1, T ) = C * ((1-1/(1+r)^T)/r)}}}

Thus in this case the PV becomes
{{{PV = \$p * ((1-1/(1+\$r/100)^\$t)/(\$r/100))}}}

Thus PV = "; \$pv= \$p * ((1-(1/((1+\$r/100)**\$t)))/(\$r/100)); print "\$pv."; \$pvp = int(\$pv); ==section output pvp ==section check p=1100 r=10 t=1 pvp=1000