Present Value and example

Present Value is the current value of a future amount of money, or a series of payments, evaluated at a given rate. also the current value of a future payment.The question for that is  What is the value of your money today that you received in the future? or What the value of a cash flow received in the future would be worth today?

Hint :  amount gets smaller
       : PV = Present Value - how much money a person has today
       : FV = Future Value - how much money a person expect to have in a future
       : i     = percentage rate paid on investment
       : t    = lenght of time of investment

Formula : PV = FV / (1+i )

Example : How much would 100 pesos received 5 years from now be worth today if the current interest rate is 10%?

Formula : PV = FV / ( 1+i )5
Subtitute: PV = 100 / ( 1+.1)5
                     = 100 / (1.1) (1.1) (1.1) (1.1) (1.1)
                     = 62.09

The 5 years interest elaborate for the benefit also for non scientific calculator user.
the 62.09 is the worth of your money (100 pesos) today.