Present Value - Fixed Interest (%)

This formula computes the Present Value (PV)for an account that will have earned compound interest at a fixed rate, given the Future Value after some number of compounding periods. 

APPLICATIONS

If you have a targeted Future Value in mind, an amount you would like your investment to become over a specified period of time, and you know the fixed interest rate you are going to earn, you can use this equation to determine how much money you need to fund the account to start.

INPUTS

The inputs are as follows:

1. (FV) Future Value - is the ending value after some period of applying compound interest
2. (i) interest rate % - is the interest rate per year
3. (n) the number of compounding periods,  the number of months

NOTES

This equation is based on the formula: `SPPW = ( 1+i)^-n`, where `PV = FV * SPPW`

The interest term is divided by 1200 in this formula to allow the user to enter the interest rate as a percent (i.e., enter 4.5 for a 4.5% interest rate) and the number of periods in months, hence The equation uses 12*100 =1200 for the denominator of the periodic interest rate.