• FV is the future value ($) • r is the rate (%) • n is the number of periods To calculate the present value of future rent, divide the future value by 1 plus the rate raised to the number of periods. ## How to Calculate the Present Value of Future Rent? The following example problems outline how to calculate Present Value of Future Rent. Example Problem #1 1. First, determine the future value ($). In this example, the future value ($) is given as 1000 . 2. Next, determine the rate (%). For this problem, the rate (%) is given as .2 . 3. Next, determine the number of periods. In this case, the number of periods is found to be 10. 4. Finally, calculate the Present Value of Future Rent using the formula above: PVf = FV / (1+r)^n Inserting the values from above yields: PVf = 1000 / (1+.2)^10 = 161.505 ($)

Example Problem #2

The variables needed for this problem are provided below:

future value ($) = 2000 rate (%) = .3 number of periods = 10 Entering these values and solving gives: PVf = 2000 / (1+.3)^10 = 145.07 ($)