Face Value

I need help with recognizing when to use either the PRESENT VALUE or FUTURE VALUE formula for annuities.?

I know the P-Value and F-Value formulas for both annuities due and original annuities. I also know what values to plug into the given equation. However, I have a hard time being able to discern when I should use either one of the two FUTURE VALUE or PRESENT VALUE equations. Are there any tricks or tips that you finance experts might have for a finance student? Thanks!

Public Comments

1. it's easy. Future value means to be received or given in the future. Present value means amount given out or taken now. Ask the question When? The more current amount is the PV. So, if you're given an amount with the caption $1,000 at the end of the month $4,000 three years from now. you know 1K is pv, 4k is fv. you use fv if u want to know the amount in the future and you use pv if u want to know the amount in the present or the current time. Try solving hundreds of problems to get a hang of it.