Complete the tabe: Compounded Month ly Compounded Semi- Annually Com pornded Annually Compounded Quarter ly Componded Daily CAmount) 5,000 4.1% 3 month 11, 200 6.2% 1 year 20,180 10 %|3$ year is,000 3% 2 years 2.2°A 4 months 18,210

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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.