Present Value The formula for present value depends on the interest rate that is available from a bank or other source. Example Suppose that the annual interest rate r is compounded at the end of each of m equal periods each year;and suppose that a cash payment of amount A will be received at the end of the kth period. Then the appropriate discount factor is 成=+) and thus the present value of a payment of A to be received k periods in the future is PV=dkA. Xi CHEN (chenxi0109@bfsu.edu.cn) Investment Science 16/174Present Value The formula for present value depends on the interest rate that is available from a bank or other source. Example Suppose that the annual interest rate r is compounded at the end of each of m equal periods each year; and suppose that a cash payment of amount A will be received at the end of the kth period. Then the appropriate discount factor is dk =  1 + r m k −1 , and thus the present value of a payment of A to be received k periods in the future is PV = dkA. Xi CHEN (chenxi0109@bfsu.edu.cn) Investment Science 16 / 174