Need help- Present Value finance question

[tskrovan]

Hey everyone. I've been away for a while, but its good to be back.

I am hoping that somebody can help me with this question, and give me the formula. I am trying to figure out the present value of a future stream of payments (both what the lump sum amount would be as well as what the monthly amount PV would be). Here are the details- By the way, this isn't a homework question, I actually need to know this for a real life application.

Payments would start in 25 years from today

Monthly payments would be $366

Interest rate would be 4% annually

The payments would last 20 years (240 payments)

If somebody could please tell me what the present value of this stream of payments would be, and the formula to arrive at it, it would be greatly appreciated.

[Dennis in MA]

No. But if you have Excel you can do it yourself. Run a PMT calculation with your 4%, 240, 366 #'s.

Then divide that # by 1.04^25.

I don't have working Excel at home. Grrr.

[Str8shootr]

I am not sure about your question, but maybe this will help.

I am just treating it like the amortization of a 25 year mortgage.

25 year term (300 months)

Interest 4%

Present Value $57,025

[shooter757]

http://www.google.com/search?hl=en&q=present+value+calculator&aq=1&oq=present+value+ca

[Dennis in MA]

PV is $22,656. (I'm at work now with my 17BII.)

Value of the 20-year payments is 60,398. Discounting that to today gives you the above answer.

[mhill]

Hey everyone. I've been away for a while, but its good to be back.

Payments would start in 25 years from today

Monthly payments would be $366

Interest rate would be 4% annually

The payments would last 20 years (240 payments)

.

Remember that after inflation (assumed 3% annually) your $366 will be equal to about $182 in todays dollars. I wouldn't presume 3% annually if I were you. I think inflation is due to hit us hard in the future. Though the common school of thought is 3% I think it will be much higher.

Just food for thought.

[CBDAVIS]

First it's a present value of an annuity, then it's present value of that amount for the delayed start.

It's easy to find the formula for each.

[mitchshrader]

anybody investing in, betting on, planning for, 25 years out is a bloomin optimist and i'd love to sell you uranium stocks but i sold em and bought hedge funds.

d00d, MONEY MARKETS are collapsing. govt BONDS are weak. BANKS are failing. buy NADA, unless you're short on beans, bullets, or consumeables that'll keep.. otherwise hedge mebbe a bit on silver, gold, and hold cash a while till you know more..

as for SELLING anything, not if you want to own it, and not for other than real value now.. trade is good and you need to consider taxable assets (cause honey, taxes are going UP) and real inflation (cause that's happening, too) ..

in other words only an optimist is betting, or those with so much a loss is trivial..