PRESENT-VALUE Function

The PRESENT-VALUE function returns a value that approximates the present value of a series of future period-end amounts specified by argument-2 at a discount rate specified by argument-1.

Usage

FUNCTION PRESENT-VALUE (argument-1 {argument-2} ... )

Parameters

argument-1 Must be of the class numeric. The value of argument-1 must be greater than -1.
argument-2 Must be of the class numeric.

Returned Value

The returned value is an approximation of the summation of a series of calculations with each term in the following form:

argument-2 / (1 + argument-1) ** n

There is one term for each occurrence of argument-2. The exponent, n, is incremented increased from one by in increments of one for each term in the series.

Example

COMPUTE RSULT = FUNCTION PRESENT-VALUE (DISCOUNT-RATE, 2000).
Note: In this example, DISCOUNT-RATE and RSULT are numeric data items. If DISCOUNT-RATE has the value 0.08, the value returned and stored in RSULT is approximately 1851.85.