PV Table for Single Cash flow
Use the PV Table for a Single cash flow when working out the Present Value for a single year.
This is the table you should use in the majority of situations.
PV Table for an Annuity
If you have an identical cash flow for each year, then you can still use the single cash flow PV Table and just calculate each year one at a time. But, you save time you can also use the PV Table for an Annuity. This works out the value in one calculation.
FV Tables
The Future value tables are not usually required – but you will see they are used in the SMA Study Guide Examples and also in some questions. This is unusual. You still get the right answer, but if we are working out the present value of a future cash flow, then you normally would not use the Future Value approach. The reason you still get the answer right is you adjust the calculation to make it work. (FV and PV are reciprocal formulas / opposite to each other – so you multiply instead of divide – as shown in the example below)
So – we recommend only using PV Tables but you can choose the one you are most comfortable with.
You can download this PDF of the PV / FV Tables.
