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Present Value Continuous Compounding Factor Calculator

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Present Value Basics of Time Value of Money Future value

✖The Rate per Period is the interest rate charged.ⓘ Rate per Period [r]			+10% -10%
✖Total Number of Periods is the total number of compounding periods for the life of the investment.ⓘ Total Number of Periods [t]			+10% -10%

✖PV Continuous Compounding Factor is used to calculate the present value of a future sum with continuous compounding at a specified interest rate over a given time period.ⓘ Present Value Continuous Compounding Factor [F_PV]

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Present Value Continuous Compounding Factor Solution

STEP 0: Pre-Calculation Summary

Formula Used

PV Continuous Compounding Factor = (e^(-Rate per Period*Total Number of Periods))
F_PV = (e^(-r*t))
This formula uses 1 Constants, 3 Variables

Constants Used

e - Napier's constant Value Taken As 2.71828182845904523536028747135266249

Variables Used

PV Continuous Compounding Factor - PV Continuous Compounding Factor is used to calculate the present value of a future sum with continuous compounding at a specified interest rate over a given time period.
Rate per Period - The Rate per Period is the interest rate charged.
Total Number of Periods - Total Number of Periods is the total number of compounding periods for the life of the investment.

STEP 1: Convert Input(s) to Base Unit

Rate per Period: 0.05 --> No Conversion Required
Total Number of Periods: 8 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

F_PV = (e^(-r*t)) --> (e^(-0.05*8))

Evaluating ... ...

F_PV = 0.670320046035639

STEP 3: Convert Result to Output's Unit

0.670320046035639 --> No Conversion Required

FINAL ANSWER

0.670320046035639 ≈ 0.67032 <-- PV Continuous Compounding Factor

(Calculation completed in 00.004 seconds)

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Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

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< Present Value Calculators

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Present Value Continuous Compounding Factor Formula

LaTeX Go

PV Continuous Compounding Factor = (e^(-Rate per Period*Total Number of Periods))
F_PV = (e^(-r*t))

What is Present Value Continuous Compounding Factor ?

The Present Value Continuous Compounding Factor is a crucial component in financial calculations involving continuous compounding. It is used to determine the current worth of a future amount of money when interest is compounded continuously over time.The continuous compounding factor
captures the growth of the investment or sum of money over time under continuous compounding conditions. Taking the reciprocal of this factor provides the multiplier to calculate the present value, aiding in various financial analyses such as investment valuation, loan calculations, and retirement planning.

How to Calculate Present Value Continuous Compounding Factor?

Present Value Continuous Compounding Factor calculator uses PV Continuous Compounding Factor = (e^(-Rate per Period*Total Number of Periods)) to calculate the PV Continuous Compounding Factor, The Present Value Continuous Compounding Factor represents the value of a future cash flow discounted at a continuously compounded interest rate. PV Continuous Compounding Factor is denoted by F_PV symbol.

How to calculate Present Value Continuous Compounding Factor using this online calculator? To use this online calculator for Present Value Continuous Compounding Factor, enter Rate per Period (r) & Total Number of Periods (t) and hit the calculate button. Here is how the Present Value Continuous Compounding Factor calculation can be explained with given input values -> 0.67032 = (e^(-0.05*8)).

FAQ

What is Present Value Continuous Compounding Factor?

The Present Value Continuous Compounding Factor represents the value of a future cash flow discounted at a continuously compounded interest rate and is represented as F_PV = (e^(-r*t)) or PV Continuous Compounding Factor = (e^(-Rate per Period*Total Number of Periods)). The Rate per Period is the interest rate charged & Total Number of Periods is the total number of compounding periods for the life of the investment.

How to calculate Present Value Continuous Compounding Factor?

The Present Value Continuous Compounding Factor represents the value of a future cash flow discounted at a continuously compounded interest rate is calculated using PV Continuous Compounding Factor = (e^(-Rate per Period*Total Number of Periods)). To calculate Present Value Continuous Compounding Factor, you need Rate per Period (r) & Total Number of Periods (t). With our tool, you need to enter the respective value for Rate per Period & Total Number of Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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